Government expected to boost ownership of Citigroup

Posted by Becky Gulden

WASHINGTON (AP) - The government is on the verge of closing a deal to significantly boost its ownership stake in Citigroup.

In return, it will demand changes be made on the troubled banking giant's board and other conditions, according to a person with knowledge of the discussions.

The increased stake in Citigroup Inc. will not require additional money from taxpayers and the bank will still have to undergo a "stress test," such as those that banking regulators started conducting this week on the nation's biggest banks, said the source, who spoke on condition of anonymity because a deal hasn't been officially announced.

An announcement is anticipated later Friday.

The government would convert some of its preferred shares in Citigroup to common shares only if the bank can get private investors to do the same, the source said.