WASHINGTON - THE US government's latest effort to address the financial crisis is a US$20 billion (S$30 billion) investment in banking giant Citigroup, along with an agreement to guarantee hundreds of billions of dollars in possible losses.
The step, announced late on Sunday, is the latest in a long list of government moves to counter the financial meltdown:
March 11: The Federal Reserve announces a rescue package to provide up to US$200 billion in loans to banks and investment houses and let them put up risky mortgage-backed securities as collateral.
March 16: The Fed provides a US$29 billion loan to JPMorgan Chase & Co as part of its purchase of investment bank Bear Stearns.
May 2: The Fed increases the size of its loans to banks and lets them put up less-secure collateral.
July 11: Federal regulators seize Pasadena, California-based IndyMac, costing the Federal Deposit Insurance Corp billions to compensate deposit-holders.
July 30: President Bush signs a housing bill including US$300 billion in new loan authority for the government to back cheaper mortgages for troubled homeowners.
Sept 7: The Treasury takes over mortgage giants Fannie Mae and Freddie Mac, putting them into a conservatorship and pledging up to US$200 billion to back their assets.
Sept 16: The Fed injects US$85 billion into the failing American International Group, one of the world's largest insurance companies.
Sept 16: The Fed pumps US$70 billion more into the nation's financial system to help ease credit stresses.
Sept 19: The Treasury temporarily guarantees money market funds against losses up to US$50 billion.
Sept 29: The Fed makes an extra US$330 billion available to other central banks, boosting to US$620 billion the amount available to the Fed through currency 'swap' arrangements, where dollars are traded for foreign currencies. It also triples to US$225 billion the amount available for short-term loans to US financial institutions.
Oct 3: President Bush signs the US$700 billion economic bailout package. Treasury Secretary Henry Paulson says the money will be used to buy distressed mortgage-related securities from banks.
Oct 6: The Fed increases a short-term loan programme, saying it is boosting short-term lending to banks to US$150 billion. It says that by year's end, US$900 billion in potential overall credit will be outstanding. It also says it will begin paying interest on reserves that banks keep with the Fed in hopes of coaxing banks into keeping more money on deposit at the central bank.
Oct 7: The Fed says it will start buying unsecured short-term debt, so-called 'commercial paper,' from companies.
Oct 8: The Fed cuts its benchmark interest rate a half percentage point, to 1.5 per cent. It follows a one-quarter point cut on April 30 and a three-quarter-point reduction on March 18.
Oct 8: The Fed agrees to lend AIG US$37.8 billion more, bringing total to about US$123 billion.
Oct 14: The Treasury says it will use US$250 billion of the US$700 billion bailout to inject capital into the banks, with US$125 billion provided to nine of the largest: Bank of America Corp, which received US$15 billion; Bank of New York Mellon Corp, US$3 billion; Citigroup Inc, US$25 billion; Goldman Sachs Group Inc, US$10 billion; JPMorgan Chase & Co, US$25 billion; Merrill Lynch & Co Inc., US$10 billion; Morgan Stanley, US$10 billion; State Street Corp, US$2 billion; and Wells Fargo & Co, US$25 billion. The US$10 billion for Merrill has been deferred until its purchase by Bank of America closes.
Oct 14: The FDIC says it will temporarily guarantee up to a total of US$1.4 trillion in loans between banks.
Oct 21: The Fed says it will provide up to US$540 billion in financing to provide liquidity for money market mutual funds.
Oct 29: The Fed cuts its benchmark interest rate to 1 per cent, matching the low point reached in 2003. The rate hasn't been lower since 1958.
Nov 10: The Treasury and Fed replace the two previous loans provided to AIG with a new US$150 billion aid package that includes an infusion of US$40 billion from the government's bailout fund.
-Nov. 12: Paulson says the government will no longer buy distressed mortgage-related assets, formerly the centerpiece of the bailout, and instead will concentrate on injecting capital into banks.
Nov 17: Treasury says it has provided US$33.6 billion in capital to another 21 banks, with the largest stake being US$6.6 billion to Minneapolis-based US Bancorp. So far, the government has invested US$158.6 billion in 30 banks.
Nov 23: The Treasury says it will invest another US$20 billion in Citigroup Inc, on top of US$25 billion provided Oct 14. The Treasury, Fed and FDIC also pledge to backstop large losses Citigroup might absorb on US$306 billion in real estate-related assets.
Citigroup will assume the first US$29 billion in losses, and after that the government will absorb 90 per cent of losses and the company 10 per cent. In return, the government will receive US$7 billion in preferred shares and warrants for more than 250 million additional shares. -- AP