WASHINGTON—The head of the FDIC is standing behind the agreement it made with Citigroup Inc. for buying Wachovia Corp. despite Wells Fargo & Co.’s new $15.1 billion deal trumping Citigroup’s plan.

Federal Deposit Insurance Corp. Chairman Sheila Bair says the agency “stands behind its previously announced agreement with Citigroup.”

The FDIC will review all proposals and work with the regulators of Wachovia, Citigroup and Wells Fargo “to pursue a resolution that serves the public interest,” Bair said.

Under the earlier $2.1 billion deal, Citigroup agreed to absorb as much as $42 billion in losses from Wachovia’s $312 billion loan portfolio. The FDIC agreed to cover losses above that level.