Moody\u0092s<\/strong> on Monday said in its \u0093Weekly Credit Outlook\u0094 that the Treasury Department<\/strong>\u0092s planned sale of its 7.7 billion shares of Citigroup this year doesn’t mean the government would remove its implicit support of the company if Citigroup were to fall into trouble again.<\/p>\n \u0093The likelihood of government support remains very high because of Citigroup\u0092s systemic importance to the U.S. and global financial system as a major counterparty, payments and clearing agent, deposit taker, and provider of credit,\u0094 Moody\u0092s said. This is important, because Moody\u0092s said it doesn\u0092t see any \u0093\u0094rating implications from the disposition of the government\u0092s 27% stake in the company.\u0094 In other words, Citigroup can still continue issuing debt at levels that assume a type of government support.<\/p>\n \u0093Permanent government ownership of shares can be an important factor to consider when evaluating the probability of government support for a bank,\u0094 Moody\u0092s said. \u0093However, in our analysis we never assumed that the U.S. government\u0092s stake in Citigroup was permanent. Instead, as noted above, our support assumptions are very high because of Citigroup\u0092s interconnectedness in the global financial system and its systemic importance.\u0094<\/p>\n Moody\u0092s goes on to say that the \u0093greatest threat\u0094 to \u0093continued government support for Citigroup and other major U.S. banks is from pending legislative proposals that would allow the government to resolve failing but systemically important financial institutions in a way that imposed losses on bondholders while still minimizing systemic risk.\u0094<\/p>\n This is the bill passed the House of Representatives in December and could soon advance to the Senate floor.<\/p>\n Even though the Obama administration is trying to sell idea that the era of \u0093too big to fail\u0094 is over, some in the market still aren\u0092t buying it. Case in point: Citigroup Inc. Moody\u0092s on Monday said in its \u0093Weekly Credit Outlook\u0094 that the Treasury Department\u0092s planned sale of its 7.7 billion shares of Citigroup […]<\/p>\n","protected":false},"author":850,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-525077","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/525077","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/850"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=525077"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/525077\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=525077"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=525077"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=525077"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}<\/img><\/a>
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