Financial Winners & Losers: Citigroup

Financial stocks were falling sharply Tuesday, after Treasury Secretary Timothy Geithner detailed new government initiatives to help the sector.
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Updated from 12:51 p.m. ET

Financial stocks were falling sharply Tuesday, after Treasury Secretary

Timothy Geithner

detailed new government initiatives to help the sector.

The KBW Bank Index was declining 13.9% to 26.74, and the

Financial Select Sector SPDR

(XLF) - Get Report

exchange-traded fund was dropping 10.2% to $8.89.

In a speech in Washington, D.C., Geithner said the Treasury will establish a Financial Stability Trust that would issue a "stress test" for major banks to evaluate potential future losses. Banks with more than $100 billion in assets will be subject to federal supervision and a stress test.

Other provisions include a public-private investment fund that would aid financial firms in shoring up their balance sheets; an expansion of the

Federal Reserve's

previously announced Term Asset-Backed Securities Lending Facility, increased government support for small-business loans and a comprehensive housing program to prevent additional foreclosures.

Geithner also emphasized increased accountability in the use of taxpayer dollars to revitalize the system. "Access to public support is a privilege, not a right," he said.

Dow Jones Industrial Average

component

Bank of America

(BAC) - Get Report

was leading the index's decline, falling 19% to $5.56. Fellow Dow members

American Express

(AXP) - Get Report

,

Citigroup

(C) - Get Report

and

JPMorgan Chase

(JPM) - Get Report

were also taking losses. American Express fell 10% to $15.97, Citi dropped 15.2% to $3.35 and JPMorgan Chase skidded 9.8% to $24.62.

Spreads on credit default swaps for Citigroup were widening as Geithner outlined his new financial rescue plan, according to a

Reuters

report. Credit default swaps are instruments that insure an entity's debt against default.

BofA and Citi are the largest participants in the government's existing Troubled Asset Relief Program, having each received $45 billion in equity investments from the government and additional guarantees on their assets.

Among other large financial firms,

Goldman Sachs

(GS) - Get Report

was down 7.7% to $90.40.

Morgan Stanley

(MS) - Get Report

fell 11.4% to $20.79.

Wells Fargo

(WFC) - Get Report

stumbled 14.2% to $16.35.