Wachovia not liquidating funds

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The failure of Wa Mu thus raised creditor concern about the health of Wachovia.Wachovia's stock price declined sharply and credit default swap spreads on its debt surged.On August 19, 2008, the Federal Reserve Bank of Richmond entered into a Memorandum of Understanding (MOU) with Wachovia.This MOU was the culmination of efforts by the Federal Reserve that had been initiated earlier through our inspection process to ensure that Wachovia completed a number of steps to improve corporate governance, risk management, liquidity, capital management, and strategic planning.

With encouragement from the Federal Reserve, Wachovia raised billion in capital in April 2008 to partially offset those losses.Wachovia also had two insured thrift subsidiaries with total assets of 5 billion.Thus, the assets of the lead national bank and two insured thrift subsidiaries comprised about 95 percent of the assets of the holding company.I will also address the lending and supervisory questions raised in the Commission's invitation letter.Wachovia Wachovia was a financial holding company headquartered in Charlotte, North Carolina, that provided commercial and retail banking services and other financial services in the United States and internationally.

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