Rivals Agree to Pause in Wachovia Fight

"Citi put the skin in the game when the sky was falling," Dahiya says. "For Wells Fargo to come and now offer a much higher price is food for shareholders, [but] when the regulators wanted someone to help out, Wells Fargo did not step up because at that time it was too risky. My sense is Wells Fargo came out when the bailout package was already finalized."

Media reports have said that the San Francisco-based Wells Fargo had also been considering making an offer under the FDIC's bidding process, but backed away at the last minute. That left Citi as the only viable contender, reports say.

Wells then made an about face with a formal offer to Wachovia late Thursday evening, which the bank's CEO Robert Steel accepted.

The FDIC had said on Friday that it stood behind the Citi deal and that it would be "reviewing all proposals and working with the primary regulators of all three institutions to pursue a resolution that serves the public interest."

But if the FDIC goes back on its word of supporting the Citi deal, it will sour its reputation and lining up future buyers should another bank tumble or fail will be difficult, Dahiya says.

FDIC chairwoman Sheila Bair said at an economic conference on Monday that regulators were working to come to a "solution and outcome that serves the public interest and I think we will have one today," according to the Wall Street Journal.