Citi is doing the right thing by bailing out those SIVs. It may be painful for their operations in the short term but it will be good for the credit market and bank in the long term. The board of directors have said in the past that there would be no bailout for SIVs, but it looks that the new CEO is stamping his authority and reversing that course. Good news for Citi.
This action could be another prelude to another reversal of the board stance. The board maintained that the dividends would stay put. I do not see how they can maintain it. The new CEO will have to propose to cut the dividend. It is the only logical thing to do to maintain its operations The cut is more necessary now that they have consolidate some $45 billion onto the balance sheet.
This move all but sure killed the super fund plan, which was not effective plan in any case. The plan was mainly designed to rescue Citi. The plan would not have solved any issue and would have prolonged the credit situation.