Citigroup to buy Wachovia banking operations Associated Press
In the latest byproduct of the widening global financial crisis, Citigroup Inc. will acquire the banking operations of Wachovia Corp. in a deal facilitated by the Federal Deposit Insurance Corp.
Wachovia, like Washington Mutual Inc., which was seized by the federal government last week, was a big originator of option adjustable-rate mortgages, which offer very low introductory payments and let borrowers defer some interest payments until later years. Delinquencies and defaults on these types of mortgages have skyrocketed in recent months, causing big losses for the banks.
Treasury Secretary Henry Paulson also welcomed the sale of Wachovia to Citigroup, saying it would "mitigate potential market disruptions." Paulson said he agreed with the FDIC and the Fed that a "failure of Wachovia would have posed a systemic risk" to the nation's financial system.
Now that a deal for Wachovia is complete, the most troubled of the nation's largest financial institutions have been dealt with. However, the FDIC estimated there were 117 banks and thrifts in trouble during the second quarter, the highest level since 2003. And that number is likely to have increased during the third quarter.
With the acquisition of Wachovia, Citigroup has reclaimed its title as the biggest U.S. bank by total assets.
The Wachovia deal caps a wave of unprecedented upheaval in the financial sector in the past six months that has redefined the banking industry
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re: 'siezed by the federal government'
The largest of the "troubled financial institutions have been dealt with", according to this article. Absorbed and consolidated that is to say. Citi is now the king of the giants that will rule the homeland. Next thing to do, pick off the little guys one by one. "Redefining the banking industry" is what that is called.
In the latest byproduct of the widening global financial crisis, Citigroup Inc. will acquire the banking operations of Wachovia Corp. in a deal facilitated by the Federal Deposit Insurance Corp.
Wachovia, like Washington Mutual Inc., which was seized by the federal government last week, was a big originator of option adjustable-rate mortgages, which offer very low introductory payments and let borrowers defer some interest payments until later years. Delinquencies and defaults on these types of mortgages have skyrocketed in recent months, causing big losses for the banks.
Treasury Secretary Henry Paulson also welcomed the sale of Wachovia to Citigroup, saying it would "mitigate potential market disruptions." Paulson said he agreed with the FDIC and the Fed that a "failure of Wachovia would have posed a systemic risk" to the nation's financial system.
Now that a deal for Wachovia is complete, the most troubled of the nation's largest financial institutions have been dealt with. However, the FDIC estimated there were 117 banks and thrifts in trouble during the second quarter, the highest level since 2003. And that number is likely to have increased during the third quarter.
With the acquisition of Wachovia, Citigroup has reclaimed its title as the biggest U.S. bank by total assets.
The Wachovia deal caps a wave of unprecedented upheaval in the financial sector in the past six months that has redefined the banking industry
----------------------------------------------------
re: 'siezed by the federal government'
The largest of the "troubled financial institutions have been dealt with", according to this article. Absorbed and consolidated that is to say. Citi is now the king of the giants that will rule the homeland. Next thing to do, pick off the little guys one by one. "Redefining the banking industry" is what that is called.
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