The US government has announced a rescue plan for troubled banking giant Citigroup after its shares plunged by more than 60% last week. The US Treasury is set to invest $20bn (£13.4bn) in return for preferred shares in Citigroup. The Treasury and the Federal Deposit Insurance Corp will also guarantee up to $306bn (£205bn) of risky loans and securities on Citigroup's books. The plan follows a $25bn injection of public funds in the bank last month. Citigroup's market value fell to $20.5bn on Friday, compared with $270bn in 2006. Last week the company announced 52,000 job losses worldwide, on top of 23,000 job cuts previously announced. It employs around 12,000 people in the UK. Citigroup has lost more than $20bn in the past year because of the global financial crisis, suffering four straight quarterly losses. Citibank UK deposit holders are covered by the Financial Services Authority. The Financial Services Compensation Scheme guarantees up to £50,000 per Citibank account holder, should the bank go bust.
