Reid: Citi Investment Isn’t Nationalization

The government’s larger stake in Citibank does not constitute a nationalization of banks, Senate Majority Leader Harry Reid (D-Nev.) argued Monday.

“I think the American taxpayer deserves some protection,” Reid said during an appearance on MSNBC’s “Morning Joe.” “That’s what this is all about.”

The Wall Street Journal reported Monday that the federal government would increase its ownership of Citigroup, increasing its investment to a 40 percent stake in the troubled bank.

“This is not nationalization, it’s protecting the taxpayers’ interest,” Reid said Monday.

“I think what we’re doing in banking now in a time of distress is the right thing to do,” the Senate’s Democratic leader argued. “I think we’re getting really close to stabilizing the banking industry.”

Reid’s comments come amidst the backdrop of a market wary of “nationalization” talk, selling off Friday afternoon after Senate Banking Committee Chairman Chris Dodd (D-Conn.) indicated he may be open to a temporary takeover of banks.

Futures markets trended positively on news of the Citigroup news.