The Charlotte Observer reports that Citigroup’s purchase of Wachovia’s was a panicked move by the FDIC to keep Wachovia solvent as nervous customers created a “silent” bank run. Customers began withdrawing their money on Friday and by Monday morning it was clear Wachovia had no liquidity left. In other words, Wachovia would’ve almost certainly failed this week had the FDIC not engineered the Citigroup deal.
Scary stuff, folks, and I’m sure we haven’t heard the last of it. I’m glad I’m a credit union member.
(h/t Suzzanne)