Bush: More rescues like Citigroup possible
The president says he told President-elect Obama about government rescue plan for bank.
NEW YORK (CNNMoney.com) -- President Bush said Monday that the first step toward economic recovery is to stabilize the financial system - and that the government may step in to help financial institutions again the way it did with Citigroup.
"This is a tough situation for America. But we will recover. The first step is to secure our financial system," Bush said after meeting with Treasury Secretary Henry Paulson. "If need be, we're going to make these kind of decisions to safeguard our financial system in the future."
Bush's statement came within 12 hours of an announcement that the federal government would step in to help Citigroup (C, Fortune 500), whose shares fell 50% last week on a loss of confidence.
The Treasury, the Federal Reserve and the FDIC said the federal government would guarantee roughly $300 billion in losses at Citigroup on its troubled assets and inject $20 billion more into the bank. That new capital injection was on top of the $25 billion given to Citigroup weeks ago as part of the $700 billion bailout passed by Congress in October.
The president said he'd spoken with President-elect Barack Obama about the decision.
"Anytime we're to make a big decision during the transition, he will be informed, as will his team," Bush said. "Secretary Paulson is working closely with the president-elect's transition team. It's important for the American people to know that there is close cooperation."
Bush's comments preceded a news conference to be held by President-elect Barack Obama in which he was to announce his economic team, including New York Federal Reserve President Timothy Geithner as Treasury Secretary.
