Charlotte, N.C., banking behemoth Wachovia tried to stay independent but the Federal Deposit Insurance Corp. said no.
Details of that effort are outlined in a Charlotte Observer story today.
The thing that’s disturbing is that Wachovia’s effort included getting assistance from the FDIC.
The FDIC said no to Wachovia’s plan, but turned around days later and announced that it would provide assistance to Citigroup in its bid to acquire Wachovia.
So, the FDIC said no to Wachovia and yes to Citigroup.
Something just doesn’t seem right about that.
3 Comments
I think the judgement was that the total cost of assisting a Citi takeover of Wachovia would be less than a direct bailout of Wachovia.
And, by the way, perhaps a bit of jusgement about the competence of management.
The management of both Citi and Wachovia have both contributed mightily to the greatest national & global financial institution meltdown in history. Wachovia’s vulnerability was, simply, that is was not too big to fail, while Washington will throw as many billions at Citi as needed to prop it up and give it life support, courtesy of US taxpayers. Maybe our election tomorrow should include a vote on which banks should be bailed out and which should be allowed the mortal consequences of grossly poor and greed-motivated management.