Citigroup is outraged that Wells Fargo would come in and break up its bargain-basement, government-financed deal to buy Wachovia Bank. But let’s hope the regulators find a way to make the Wells Fargo deal happen: It won’t cost taxpayers anything, and it may be just the boost of confidence that financial markets need. Wells Fargo surely has gone through Wachovia’s books with a fine-toothed comb, and it sees some value in the mortgage value that Citi and the FDIC were treating as toxic.

Shares of other troubled banks like National City and Downey Financial are getting a boost from the news, but Keycorp is trading lower.

For St. Louis, the Wells Fargo deal is a decent outcome. As a previous post explains, Wachovia Securities had a doubtful future as a standalone entity. And, as I mentioned in Tuesday’s column, Wells Fargo should be a good parent for Wachovia Securities — its current brokerage operations are not very large, and its likely to maintain a large brokerage headquarters in St. Louis.