Friday, September 26, 2008

Wamu Becomes Largest Bank Failure Ever

From the Portland Business Journal:

"J.P. Morgan Chase bought the bulk of Washington Mutual’s banking operations Thursday in a deal orchestrated by federal regulators who had seized control of the troubled thrift.

In a sign of the bank’s worsening condition, regulators said WaMu had lost $16.7 billion in deposits since Sept. 15.

Saying WaMu had insufficient liquidity to meet its obligations and was “in an unsafe and unsound condition to transact business,” the federal Office of Thrift Supervision closed the bank and appointed the Federal Deposit Insurance Corp. as receiver. The FDIC held a bidding process that ended in the sale to J.P. Morgan.

Regulators, who termed this the largest U.S. bank failure ever, said there will be no effect on the bank’s depositors, but it appeared the WaMu shareholders would be wiped out as a result of the deal."