It was a busy weekend for the United States federal regulators, with the financial markets plunging further. The regulators were nearing the approval of the plan to rescue Citigroup from its current plight.

Citigroup officials presented the plan of action to the Federal Reserve and Treasury Department officials on Fridays, and the negotiations extended over the weekend. This could be the indication of the fact that the crisis could turn sourer. There is a speculation that the government would shoulder the losses Citigroup if it crosses a certain threshold.

Citigroup lost half its value in the stock market last week. The stock of the Citigroup traded $3.77 closing last week as in comparison to $30 last year.  Although the bank officials maintain that everything is under control, the analysts’ opinion of their deteriorating finances cannot be ignored.

What more, president elect Barack Obama is working continuously and has assured a much more ambitious plan to stabilize the economy. Some Democrats in the Congress have suggested that the government should spend as high as $ 700 billion over the next two years.

The big question is that whether the government with its third effort to rescue the faltering economy would be successful at all.

Image

Via: NYTimes