What are some arguments in favor of continuing government support of

With more than $2 trillion in total assets, Citigroup is one of the largest and most global banks in the world. It has more than 200 million customers in more than 100 countries and offers a vast array of financial services. While Citigroup has been a highly profitable and successful bank, in 2008 massive losses on securities related to home loans and other asset-backed securities caused negative profits and damage to its capital that threatened the bank’s solvency. The U.S. government injected more than $40 billion of new capital in an effort to prevent the bank’s failure. The government also provided guarantees on more than $300 billion of risky loans made by Citicorp.

Questions to answer:

  1. What are some arguments in favor of continuing government support of Citigroup? Discuss who would be hurt by the bank’s failure. Is the failure of Citigroup different from that of other firms? Does the government have people to manage such a global finance enterprise? 
  2. What are the counterarguments in favor of letting the bank fail? Discuss the concepts of free markets and capitalism that create competition and allow unsuccessful firms to fail. Does bailing out large banks cause them to take excessive risks on the theory that they are “too big to fail”?

Requirements of the assignment  –

  • All papers must use a minimum of 3 sources. The textbook is an acceptable source. 
  • All papers must follow all APA requirements. (10% deduction if not) 
  • Two Page Minimum and Maximum. 
  • Title page and reference pages are required. However, they do not count towards any page count.Writing should reflect an understanding of the chapter’s basic concepts, thorough research, and logic and critical thinking skills.
  • The introduction is attention getting with sufficient background information to establish the topic and a clear thesis statement.
  • The conclusion summarizes the main points and leaves the reader with a strong comprehension of the paper’s significance and the author’s understanding.
  • Grammatically correct – No spelling, grammar, or mechanics errors.

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