the US Government buys part of a bank??
U.S. eyes large stake in Citigroup
Read the above article and reply to this blog with a “meaty” four paragraph reflection essay. Each paragraph should have at least 5 to 6 thoughtful sentences. Additional resources you can use to develop your response are the following:
The assignment is due by COB on Friday, February 27th. If you have any questions please Mr. Snee.
On Monday February, 23 Wall Street Journal wrote an article about talks of the government owning Citigroup Inc. This is because as of late Citi bank has been severely struggling. The talk has not even been that the government would own only a small part, but instead the government would be, “…substantially expanding its ownership of the struggling bank.” Substantially expanding is also known as the government holding up to 40% of Citigroup’s stock. The bank executives are not so pleased and are hoping that the government will only own about 25%.
Many people are on the fence about this event occurring. Some say that by doing this the government will have too strong an influence over finance, that they shouldn’t be delving into. Other points against the government are that the government watched this happen and now they’ll be able to fix this? Not so likely. People think that the government will make things worse not better.
The people of America are not the only ones worried. More nervous are the actual shareholders of Citigroup. Shareholders are nervous that, “…their stakes might be further diluted.” They also fear that when people find out that the government is involved, they’ll quickly switch to other banks. Citigroup executives and board of directors are worried as well. Many people have been speculating that the government will try to own other banks but representatives of the White House deny these claims.
I personally believe that the government should not take over the banks. Nationalization is bad and to permit a free market the government should not get involved. I believe that that would just make things worse and much more confusing. If the government does want to help struggling banks then they should not interfere so drastically. My advice is to see what happens and if things get worse, then interfere.
Just passing by.Btw, your website have great content!
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