Tuesday Update: The Wachovia Battle Continues; Fed Buys Short-Term Debt

The Wachovia bank battle continues between Wells Fargo and Citigroup, with yesterday's afternoon announcement of a "cease-fire" of sorts between the rival suitors.

This was after Citigroup filed a $60 billion suit because Wachovia entertained a better offer from Wells Fargo on Friday. All three banks' stocks slid in Monday's trading.

Analysts now are speculating that the bidding banks may split Wachovia geographically because the original Citigroup bid aimed not just to acquire Wachovia, but buoy Citi's financial position.

On Tuesday morning, the Federal Reserve announced the creation of the Commercial Paper Funding Facility (CPFF), to buy commercial short-term debt (three-month and asset backed commercial paper) to help provide liquidity in the credit markets that are being squeezed shut for many borrowers including small businesses and governments.

In the global response to the continuing credit crisis, Australia's central bank slashed its benchmark interest rate by the biggest amount in 16 years. The move by Australia sparks hopes for more easing of interest rates by other central banks.

About the Author

Linda McGlasson

Linda McGlasson

Managing Editor

Linda McGlasson is a seasoned writer and editor with 20 years of experience in writing for corporations, business publications and newspapers. She has worked in the Financial Services industry for more than 12 years. Most recently Linda headed information security awareness and training and the Computer Incident Response Team for Securities Industry Automation Corporation (SIAC), a subsidiary of the NYSE Group (NYX). As part of her role she developed infosec policy, developed new awareness testing and led the company's incident response team. In the last two years she's been involved with the Financial Services Information Sharing Analysis Center (FS-ISAC), editing its quarterly member newsletter and identifying speakers for member meetings.

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