WASHINGTON — The Treasury Department on Friday released guidelines of the program it used under a $700 billion bailout package to justify its $20 billion rescue of Citigroup.

It also unveiled guidelines for a new insurance program for troubled assets called the Asset Guarantee Program. At this point, Treasury said it is exploring the use of this insurance program to provide Citigroup with a guarantee of up to $5 billion as part of an agreement that was disclosed in late November when the Treasury, Federal Reserve Board and Federal Deposit Insurance Corporation announced their plans to help rescue Citigroup.

Both the guidelines for the $20 billion purchase of Citigroup stock and the new insurance program were delivered to Congress this week as required by law.

Under the new insurance program, Treasury said it would assume a loss position on certain assets that the department will select, and collect a premium.

Although Treasury is currently considering using the insurance program for Citigroup, its report to Congress seemed to leave open the possibility that other institutions may utilize it. Participation in the insurance program, Treasury said, would be determined on a "case-by-case basis."

"The objective of this program is to foster financial market stability and thereby to strengthen the economy and protect American jobs, savings, and retirement security," Treasury said.

Treasury noted that it is currently reviewing the possibility of developing other programs to insure troubled assets as well.

The program used to purchase the $20 billion of preferred Citigroup stock, meanwhile, has been dubbed the "Targeted Investment Program." So far only Citigroup has used this program, and it is unclear if other companies may be eligible to utilize it in the future.

Treasury said it considers five factors before deciding if a company is eligible for either the Targeted Investment or the Asset Guarantee programs.

Those include the extent to which the "destabilization of the institution could threaten the viability of creditors" and whether or not an institution is "sufficiently important to the nation's financial and economic system that a loss of confidence in the firm's financial position could potentially cause major disruptions to the credit markets."

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.