Citigroup Buys Wachovia

The NY Times reports that Citigroup will buy Wachovia's banking operations: "As part of the deal, Citigroup will absorb up to $42 billion of losses on Wachovia’s $312 billion pool of loans — but the Federal Deposit Insurance Corporation will absorb losses beyond that." Citigroup will give the FDIC "$12 billion in preferred stock and warrants as compensation." The two company had been in talks since late last week. Also, the FDIC says Wachovia didn't fail, "For Wachovia customers, today’s action will ensure seamless continuity of service from their bank and full protection for all of their deposits. There will be no interruption in services and bank customers should expect business as usual.”