Monday, September 29, 2008

Bernanke, Paulson praise deal by Citigroup to acquire Wachovia banking operations

WASHINGTON, Sept. 29 (KUNA) -- Top U.S. financial officials on Monday praised the deal by Citigroup Inc. to acquire the banking operations of Wachovia Corporation.

In the latest move in the 2-week-old Wall Street meltdown, Citigroup will absorb up to 42 billion dollars of losses in the deal, with the Federal Deposit Insurance Corporation (FDIC) covering any remaining losses, the government agency said on Monday. Citigroup also will grant the FDIC 12 billion dollars in preferred stock and warrants.

Federal Reserve Chairman Ben Bernanke on Monday voiced support for the FDIC actions, which he said demonstrate the U.S. government's "unwavering commitment to financial and economic stability." U.S. Treasury Secretary Henry Paulson also praised the deal, saying it would mitigate potential market disruptions. A failure of Wachovia would have posed a "systemic risk" to the U.S. financial system, Paulson said.
Read more:

No comments: