Recently, in news, Wachovia is the talk of the media. However, the concerns for the new transition of the company ownership has created alot of questions regarding its current client/customers with accounts, investments, and other financial services.
Talk of a Merger:
Circulating in the media is the talk of the new merger. "Citigroup buys the bank operations of the Wachovia corporation. They will assume about $42 billion on losses tied to Wachovia's riskiest mortgages and will pay the Federal Insurance Deposit Corporation $12 billion in preferred stock and warrants" according to the NewYork Times September 30, 2008, (E. Dash & Andrew Ross Sorkin).
The reason for this merger was "to prevent what would have become the second largest big bank failure in lesss than a week." "Previously, the government seized Washington Mutual and sold the bulk of it's operations to JPMorgan Chase. " (E.Dash & Sorkin)
According to Shelia C. Blair, the chairwoman of the F.D.I.C., in a statement that "This action was necessary to maintain confidence in the banking industry given the current financial market conditions."
All these stern measures in order to protect whom exactly? Well for some, these measures will alot of the current account holders within the company. It seems that they are taking all of the necessary actions in order to protect all of it's clients.
Ms. Bair also added that, “There will be no interruption in the services and bank customers should expect business as usual.”
These actions have conclusively showed the efforts of the Wachovia Corporation to help make an easy transition to adapt to the current changes in ownership. Keeping customers informed of the changes is not only the right thing to do, but it also shows the responsibility of the company and its clients. But, others still want to know what does this transition mean for the customers and how will they relay this change to it's customers?
Wachovia Corporation advises to its publics that it "will remain a public company with two main operatin subsidaries: Wachovia Securities, the nations 3rd largest brokerage firm, and Evergreen Asset managment, a leading provider of asset management services." (http://www.wachovia.com/)
"The merger is "simply an incredible fit that will result in an immensely strong, stable financial services company that will carry on Wachovia's proud tradition of being one of the very best financial institutions in the world. Wachovia also states that "This isn't a bank failure. Wachovia's banking operations has been acquired by Citigroup, but will continue to operate as an open bank."(http://www.nytimes.com/2008/10/10/business/10bank.html?_r=1)
How to Deal with the Crisis...
The circulation of rumor that Wachovia is closing has become turmoil for the company. With the current economic conditions the country is facing, yet again another company is needing a "bailout." Don't fret Wachovia customers, clients, investors, stock/stakeholders...You have Citigroup to the rescue.
Wachovia also "encourages employees and vendors to continue to operate business as usual and that shareholders of Wachovia's stock won't be wiped out of this deal." Also, there are "no current changes to Wachovia's board of directors however, two Wachovia directors will be joining Citigroup's board." (http://www.nytimes.com/2008/10/10/business/10bank.html )Furthermore, Wachovia stresses that "customers of both companies to continue banking as usual, and to feel confident that their deposits are secure." With an increase in uncertainty amongst customers, Wachovia has "temporarily extended customer service call center hours in order to help participants during this time of financial market volatility." (http://www.nytimes.com/2008/10/10/business/10bank.html)