Treasury said had no choice on Citigroup investment

Pedestrians walk past a Citibank branch in Washington January 19, 2010.

WASHINGTON (Reuters) - The U.S. government had to invest bailout money in Citigroup (C.N) to keep the financial crisis from worsening and should make money on its investment, a senior Treasury Department official said on Thursday.

Herbert Allison, assistant Treasury secretary for financial stability, told a Congressional Oversight Panel that the government had to act in the fall of 2008 because further deterioration of Citigroup would have caused doubt that U.S. policymakers would support the banking system.

"More generally, given Citigroup's substantial international presence, global liquidity pressures would likely have increased and confidence in U.S. assets more broadly would have declined," Allison said.

(Reporting by Glenn Somerville and David Lawder; Editing by Theodore d'Afflisio)