Reports indicate that this afternoon Citi is close to an agreement with the government whereby losses due to risky assets on the bank's balance sheet would be limited. A new "bad bank" entity would be created to house approx. $50 billion in risky assets, by one estimate. The government would assume losses beyond a certain level, although as yet, that level has not been disclosed (they are still negotiating).
Via the WSJ
Under the plan, Citigroup and the government have identified a pool of
about $306 billion in troubled assets. Citigroup will absorb the first
$29 billion in losses in that portfolio. After that, three government
agencies — the Treasury Department, the Federal Reserve and the
Federal Deposit Insurance Corp. — will take on any additional losses,
though Citigroup could have to share a small portion of additional
Coverage (as of Sunday afternoon night):
UPDATE 2: NY Magazine's Daily Intel blog has a good round up of (mostly negative) responses to the Citi bailout here.