Wachovia bank takeover involves more government money

Denver News.Net
Monday 29th September, 2008

In the latest US bank consolidation effort, banking giant Citigroup will buy the bulk of the operations of fourth-largest bank Wachovia Corp.

In return for Citigroup taking on the banking business of Wachovia, it will receive some government help to absorb some of Wachovia’s sub-prime losses.

The Federal Deposit Insurance Corp, which announced the deal, said the takeover should not be viewed as a bail-out, and assured Wachovia customers that their deposits would be safe.

Citigroup will take on more than $40 billion in losses.

Last week, Wachovia was in talks about a possible takeover at the same time as Washington Mutual became the largest bank in US history to fail.

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