Is Citigroup's Wachovia assets buy boosting confidence in Banking System?

By Eliot James
29 September 2008 @ 11:56 am EDT

Citigroup Inc. agreed to buy Wachovia Corp.'s banking operations with the assistance of the Government's Federal Deposit Insurance Corp. amid a financial crisis in the largest economies in the world.

A Wachovia customer uses an ATM near the company's headquarter in Charlotte, N.C., Monday, Sept. 29, 2008. Citigroup Inc. will acquire the banking operations of Wachovia Corp., one of the nation's largest banks, in a deal facilitated by the Federal Deposit Insurance Corp. (AP Photo/Rick Havner)

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The FDIC says it assisted taking action to protect all depositors, ensuring smooth operations for customers, and keeping banking assets in private hands.

"[The assistance] helps maintain confidence in our banking system -- all without any likely cost to the Federal Deposit Insurance Fund," said John C. Dugan.Comptroller of the Currency and FDIC Board member.

Citigroup will pay Wachovia $2.1 billion in stock and will assume another $53 billion of the Charlotte-based bank's debt.

Is Citigroup's Wachovia assets buy boosting confidence in Banking System?

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