WASHINGTON — The Federal Deposit Insurance Corp. used the "systemic-risk" exception for the first time in history Monday so it could creatively find a way to sell Wachovia Corp.'s assets to Citigroup Inc. while protecting the government from losses.

Using the exception allowed the FDIC to cover part of Citi's cost should the loss on Wachovia's assets exceed $42 billion, and enabled it to receive $12 billion in preferred stock and warrants from Citi. Under the transaction, all depositors were protected.

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