Wachovia, the fourth-largest bank in the US, has been taken over by Citigroup as part of a Government-backed rescue deal.
The Federal Deposit Insurance Corporation (FDIC) announced the deal today, which will see Citigroup take on $312bn of Wachovia’s loans. The FDIC says customers deposits are fully protected and the bank will continue to operate as normal. Sheila Bair, chairman of FDIC, says: “This morning's decision was made under extraordinary circumstances with significant consultation among the regulators and Treasury. This action was necessary to maintain confidence in the banking industry given current financial market conditions.” Citigroup will have to absorb around $42bn of Wachovia’s losses unde...
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