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Was the Citi Bailout a Bad Idea?

Major risks for competitors, small banks.

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Citigroup got its bailout, its share price is up—everything’s good, right? Not so fast, says The New York Times’ Eric Dash. “Almost overnight, Citigroup went from being the sick man of the industry to an institution with an edge over its competitors,” he writes. Those competitors, who have not yet sought a bailout, may hit up the government for a similar deal so as not to fall behind. Small banks could suffer, Dash writes, because the government has lined up behind the big boys. Then there’s the possibility of Citi needing a third bailout—with the government this time offering less than favorable terms.

Read it at The New York Times

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