Another one of the nation's biggest banks is changing hands.
The federal government brokered a deal for Citigroup incorporated to buy Wachovia banking operations...making the Charlotte-based bank the latest casualty of the global financial crisis.
Citigroup will absorb up to $42 billion in losses.
Radford University Finance Professor Steven Beach weighs in on the sale. "The reason this happened to Wachovia is because they have many loans to people who have these mortgage payments and if they're missing mortgage payments that really causes problems to a financial institution."
According to Wachovia, the sale is expected to close by the end of the year.
So what does this mean for customers? A spokesperson tells us customers of both companies should continue banking as usual and feel confident their deposits are secure.
We also spoke with the FDIC, which stands for Federal Deposit Insurance Corporation. Leaders there also tell us once the deal is approved there will be no impact on customers. They'll just be banking with Citigroup instead of Wachovia.
As for the future of Wachovia employees, the company says it's too soon to answer and that workers and vendors should continue to operate business as usual.
"It's really an emergency situation and we should expect to see many more mergers for financial institutions....and so don't be surprised when you see people you thought were rivals...working together in the near future," predicted Beach.
We did some checking for you and Wachovia Securities is not included in the buyout. It will continue to operate independently of Citigroup.
For more information on the buyout click here:
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