Sources: Government Working On Citigroup Rescue

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WASHINGTON (AP) -- The government is weighing a plan to rescue Citigroup Inc.

Sources say the Treasury Department and the Federal Reserve have been in discussions to devise a strategy to stabilize Citigroup, whose stock has been taking a beating on worries about its financial health.

One option said to be under consideration is taking some of the risky assets held by Citigroup off its balance sheet, a move that would give the company more breathing room. The sources say it's unclear, however, exactly how that option might be structured.

The company has seen its shares lose 60 percent of their value in the past week, reflecting a crisis of confidence among investors.

Until just a couple of months ago, Citigroup was the largest bank in the world by assets. It's such a large, interconnected player in the financial system that if it were to collapse, it would wreak havoc on the already fragile economy.

(Copyright 2008 by The Associated Press. All Rights Reserved.)

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