Why the Citigroup Talks Broke Down

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June 13 (Bloomberg) -- The U.S. Justice Department has asked Citigroup for more than $10 billion to settle a probe into the lender’s sale of mortgage-backed bonds before the 2008 financial crisis, a person familiar with the negotiations said. Keri Geiger has more on Bloomberg Television's "Taking Stock." (Source: Bloomberg)

$10 billion is the amount of money that the justice department is seeking into the settlement over the sale of mortgage-backed bonds.

Jpmorgan settled on a similar thing for $13 billion.

That is the biggest settlement we have seen.

Bank of america is right behind them, anywhere between $12 billion and $70 billion, and now we have a spread of between four billion dollars and $10 billion.

Citigroup shares are down two percent today, so the market is not reacting as well as we know enough expected.

-- we would have expected.

Why would they come out with this number?

The bank has a number they have in mind that they're comfortable with doing.

To the department of justice as the comfortable number for them.

That is why the settlements can take months to negotiate.

And they are very difficult.

You have a lot of rds involved.

There really is no straight line to get into that number.

Is there something specific they're using as a guidepost for the other banks?

Or is that linked to the amount of mortgage-backed bonds that were sold or what someone claims they lost?

Not necessarily.

There did seem to be some linkage, however this one seems to be disproportionate, it is much better than what some of the other banks had.

City might be paying more for less exposure to mortgage-backed securities.

Was there any indication as to why the talks stalled this week at?

I think that these talks stall often.

I think that things come up, i think it will get on track soon.

And they are also in the middle of negotiating for bank of america.

It is a very similar type of thing.

Jacob amerco will go after jpmorgan, and that is between seven t billion dollars and $12 billion -- $12 billion and $17 billion.

Jpmorgan has already settled?

They settled last year.

For $13 billion.

So we will have to wait and see what goes on between a good america and the settlement talks there.

Think of america is large because they have acquired merrill lynch, which gave the ,m and enormous amount of

This text has been automatically generated. It may not be 100% accurate.


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