Citigroup Inc. will provide emergency support to seven structured-investment vehicles, adding $49 billion in assets and depleting the financial conglomerate’s capital base, according to the Wall Street Journal.The action could relieve the growing anxiety in credit markets that SIVs could be forced into selling assets at reduced prices, but increases pressure on Citigroup, which is facing massive losses after this summer’s global credit crunch.

SIVs were created to operate separately from banks by issuing short-term debt to investors and using the funds to purchase higher-yielding assets. After the subprime mortgage meltdown this summer, SIVs have been forced to sell assets in order to pay off maturing debt.

Citigroup said its SIVs currently have $49 billion in assets, down from $87 billion in August. Citigroup said won’t immediately take over the assets, but will provide a backstop to the SIVs, hopefully giving confidence to investors.

The move comes just days after Citigroup named Vikram Pandit as its new CEO, signaling that more radical steps may be in store. In a recent filing to the Securities and Exchange Commission, Citigroup said it had “no contractual obligation” to fully support any of its SIVs.

Last month, Citigroup announced up to $11 billion in potential losses for the fourth quarter, but then received a $7.5 billion capital infusion from the Abu Dhabi government.

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