Updated from Tuesday, March 24

Wells Fargo's ( WFC) aggressive writedown of bad assets acquired in its deal for Wachovia may have better positioned the bank to take advantage of the massive government initiative to unburden bank balance sheets.

The Public-Private Investment Partnership, the Obama administration's plan to finance up to $1 trillion worth of distressed-debt deals, intends to kick-start the credit markets, drive up prices, and allow banks to start lending more aggressively again.

Regardless of how successful the government's plan is, Wells Fargo's decision to significantly reduce exposure to troubled housing debt and its minimal exposure to credit-card and auto debt -- which are expected to drive the next wave of consumer defaults -- set it apart from its peers. The company is better positioned to move forward in a tough economic environment, with a leg up to book bigger profits ahead if credit-market conditions improve, according to some experts.

Bart Narter, senior vice president of banking at the analyst and consulting group Celent says Wells stands out from the herd in terms of risk management and timely, strong-fisted writedowns.

"They're not getting any more of a windfall than other banks, they're just going to see it reflected in their financials more because they wrote it down more aggressively," Narter says. "If Wells marked bad loans down to 40 cents on the dollar, and Citi marked it down to 60, and the government buys it at 70, Citi will only make $10 on that, but Wells will make $30. I think it's a good strategy -- you kind of say, 'Times are tough, we're going to acknowledge that and write them down, and if markets improve, then we can benefit from that.'"

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