On January 2, 2009, the Treasury released the program description for the Targeted Investment Program, under which the Citigroup investment that was made on November 23, 2008 was made. Like the Systemically Significant Failing Institutions Program, eligibility and form, terms and conditions of any investment will be determined on a case-by-case basis, and there is no deadline for participation in the program.
Unlike the Systemically Significant Failing Institutions Program, the threshold for participation does not include that the institution is “at substantial risk of failure.” Otherwise, the programs are virtually identical. The Treasury has identified five factors that may be considered in determining whether an institution is eligible for participation.
- The extent to which destabilization of the institution could threaten the viability of creditors and counterparties exposed to the institution, whether directly or indirectly; [The SSFI Program is based on the “extent to which failure of the institution could threaten….”]
- The extent to which an institution is at risk of a loss of confidence and the degree to which that stress is caused by a distressed or illiquid portfolio of assets; [This consideration is not included in the SSFI Program.]
- The number and size of financial institutions that are similarly situated, or that would be likely to be affected by destabilization of the institution being considered for the program;
- Whether the institution is sufficiently important to the nation’s financial and economic system that a loss of confidence in the firm’s financial position could potentially cause major disruptions to credit markets or payments and settlement systems, destabilize asset prices, significantly increase uncertainty, or lead to similar losses of confidence or financial market stability that could materially weaken overall economic performance; and
- The extent to which the institution has access to alternative sources of capital and liquidity, whether from the private sector or from other sources of government funds.