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Unpublished Paper
Et tu, Brute? The Downfall of Wachovia Bank and the Proper Roll of the Federal Deposit Insurance Corporation in Providing Open Bank Assistance
ExpressO (2009)
  • Angelo M Metaxatos, University of Miami
Abstract
In the autumn of 2008, our country’s banking system, crippled by risky lending practices and over-leveraging, was teetering on the precipice of widespread failure. During this period, the Federal Deposit Insurance Corporation (FDIC) played a crucial role in assisting some banks, and acting as a receiver with others. When Wachovia Bank, one of our country’s largest financial institutions, was in danger of failing at the peak of the crisis, the FDIC concluded they were “too big to fail” and took the extraordinary step of providing open bank assistance. When, as a result of this assistance, Citigroup offered to purchase Wachovia in late September, it appeared to many that the worst of the crisis was over. The worst, however, was yet to come. The resulting fight over Wachovia by Citigroup and Wells Fargo threatened to further undermine the already fragile banking industry, condensed a year’s worth of complex litigation into a span of a few weeks, and ultimately called into question the proper role of the FDIC, in providing open bank assistance.
Keywords
  • FDIC,
  • Wachovia,
  • Open Bank Assistance,
  • Emergency Economic Stabilization Act,
  • Exclusivity Clause
Disciplines
Publication Date
May 12, 2009
Citation Information
Angelo M Metaxatos. "Et tu, Brute? The Downfall of Wachovia Bank and the Proper Roll of the Federal Deposit Insurance Corporation in Providing Open Bank Assistance" ExpressO (2009)
Available at: http://works.bepress.com/angelo_metaxatos/1/