Citigroup to Buy Wachovia, Backed by FDIC
Posted Sep 29, 08 9:00 AM CDT in
Business
(Newser)
–
Citigroup will purchase struggling Wachovia’s banking operations in a $2.2-billion government-backed deal, the Wall Street Journal reports. The FDIC has agreed to take on a portion of potential losses in the plan, which leaves three banks, including Bank of America and JP Morgan Chase, in control of nearly a third of deposits nationwide, the Washington Post notes.
The deal was made under the auspices of the Federal Reserve and the Treasury department. It bolsters the flagging Citigroup, which was a key player in the credit crunch and saw its shares drop to $20 from $50 last year amid $40 billion in writedowns. The FDIC attempted to minimize any market fallout from the decision. “On the whole, the commercial banking system in the US remains well capitalized,” said its chairwoman.
Sources::
Wall Street Journal,
Washington Post,
New York Times
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