Sunday, November 29, 2009
What Happens to Citibank's $8 Billion Loan to Dubai?
On Friday, I provided some specifics about who had loaned Dubai money, and the potential fallout from Dubai's debt crisis.
But I just found another interesting tidbit.
Specifically, 7 Days - one of the largest papers in Dubai - wrote in March:
The US public will be “outraged” by Citibank’s $8 billion loan to Dubai just six weeks after the bank was bailed out, US House of Representatives domestic policy subcommittee chair-man has said. Dennis Kucinich commented on the Dubai loan and other US banking investments as a congressional panel released a report that strongly questioned Citibank’s actions. The report, shown to 7DAYS, cites the Dubai loan as the largest of the “questionable transactions” by banks after the US government bailed them out. It notes that the loan to Dubai’s public sector came on December 14, just six weeks after the US government gave Citibank a $25 billion bail-out.
Will Citi be repaid in full on its $8 Billion loan, which apparently came out taxpayer bailout money?
The report quotes Win Bischoof, then chairman of Citi, as saying the bank agreed to the Dubai loan because “we continue to place the Gulf region among our globally most significant markets”. The report also questions JP Morgan’s $1 billion investment in India and Bank of America’s $7 billion investment in China. “When the American people find that their tax dollars, which were supposed to be used to get us out of this financial crisis, are instead being used to ship jobs and investments overseas, there will be outrage,” Kucinich said. The report notes the loans were not illegal and that it is not known if they were directly funded by bail-out funds. A Citibank official was quoted at the time as saying the $8 billion came from the bank’s own funds and third party sources. The report was released as the committee prepares to question banking chiefs about their use of bail-out funds.
4 comments:
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Good question! I wonder if the loan even shows up on their books.
ReplyDeleteNothing in comparison to Fed. gov. 24 TRILLIONS $ issued this year during "bailout".
ReplyDeleteI think one day they will run out of cotton to produce more greenback :)
ReplyDeleteDubai is one of the most visited countries today and I can't believe that. It happens in just few years. And now Citibank is having a loan on Dubai.
ReplyDelete