The government says that Citigroup (C) needs to raise $10 billion. Citi believes otherwise.

According to The Wall Street Journal, if the bank’s view of its status prevails, “Citigroup could wind up having a roughly $500 million cushion above what the government is requiring.”

If Citi does have to raise $10 billion, depending on how onerous the terms are, current shareholders could be diluted by 50%.

Douglas A. McIntyre