Frigid temperatures this weekend prompt cold weather advisories

MPR News helps you turn down the noise and build shared understanding. Turn up your support for this public resource and keep trusted journalism accessible to all. 

Turn Up Your Support

The head of the FDIC said the agency is
standing behind the agreement it made with Citigroup Inc. to buy
Wachovia Corp. despite Wells Fargo & Co.'s new $15.1 billion deal
trumping Citigroup's plan.

      Federal Deposit Insurance Corp. Chairman Sheila Bair said Friday
the agency "stands behind its previously announced agreement with
Citigroup."


      The FDIC will review all proposals and work with the regulators
of Wachovia, Citigroup and Wells Fargo "to pursue a resolution
that serves the public interest," Bair said.


      Citigroup, for its part, demanded that Wachovia call off its
deal with Wells Fargo, saying its agreement was exclusive.


      Under the $2.1 billion deal struck earlier, Citigroup agreed to
absorb as much as $42 billion in losses from Wachovia's $312
billion loan portfolio. The FDIC agreed to cover losses above that
level.


      The surprise announcement early Friday by Charlotte, N.C.-based
Wachovia that it had agreed to be acquired by Wells Fargo in the
all-stock deal - without government assistance - upended what had
appeared to be a carefully examined arrangement and caught
regulators off guard.


      The Federal Reserve, which has regulatory oversight of the three
big banks, said it hasn't had time to review the proposed sale of
Wachovia to San Francisco-based Wells Fargo but will work to ensure
that all creditors and depositors of Wachovia are protected.


      In a brief statement, the Fed said while it and the Treasury
Department's Office of the Comptroller of the Currency had
conducted an extensive review of the Wachovia-Citigroup deal, it
had not yet had time to review the new offer from Wells Fargo.


      The Fed said regulators will be working with Wachovia and Wells
Fargo "to achieve an outcome that protects all Wachovia creditors,
including depositors, insured and uninsured, and promotes market
stability."


      Bair noted in her statement that "under either proposal, all
banking customers of the merged institutions would be fully covered
with no disruptions in service."


      AP Economics Writer Martin Crutsinger contributed to this
report.
      

Gallery

Rep. Jim Ramstad talks about revised bailout bill

Citigroup to buy Wachovia banking operations

Analysts say local financial firms will survive turmoil

Business and Economic News

Wachovia says it agreed to be acquired by San
Francisco-based Wells Fargo in a $15.1 billion all-stock deal.  But Citigroup now demands that Wachovia abide by the terms of its earlier deal to buy Wachovia's banking operations.

Wells Fargo Reports 11 Percent Drop In Quarterly E

Wells Fargo agrees to buy Wachovia; Citi objects

Go Deeper.

Like this?