This is very much an open debate and there is no hard and fast rule. If you take the model of FDIC seizures - like Indymac or others - then the shareholders are wiped out and the assets are passed off to another bank.

This most likely wouldn't be the case with Citi or Bank of America. This leaves a few other models. The feds could seize a bank, pay out shareholders at the market price and call it a day.

They could seize the banks and pay shareholders nothing - similar to the UK and Northern Rock. They could put in so much equity that existing shareholders would be wiped out anyway (AIG). Or they could just take the banks over and leave shareholders in play - similar to the takeover of Fannie Mae (FNM) and Freddie Mac (FRM).

This last option doesn't seem to make sense. Why should the shareholders get any benefit from the governments intervention. My guess, in this case, is that eventually they will not and the shares would be wiped out.

What will happen to individuals who have Citibank savings deposits in the US and those with foreign deposits?