by Laura Conaway

Is it just me, or is the rescue plan for Citigroup essentially a case of Plan A meets Plan B, then bails out major financial institution?

The rescue package calls for regulators to back $306 billion in risky assets on Citigroup's balance sheet — an amount not quite half of the original $700 billion Congress approved for buying up toxic mortgage-backed securities. Let's call that Plan A, or at least a rather loud echo of it.

 

As you know from hanging out on Planet Money, government leaders soon decided to set aside the idea of buying toxic assets in favor of injecting capital directly into banks. Let's call this move to buy stock in banks Plan B.

Now look again at the Citigroup rescue. In addition to backing those $306 billion in risky assets, the federal government will buy $20 billion worth of preferred shares in Citigroup — to go with an earlier capital injection of $25 billion.

Seriously, I'm seeing shades of Plan A and Plan B, rolled into one. You?