Feds Seize & Sell WaMu; Biggest Bank Failure in US History
Moving fast in the midst of an extraordinarily troubled U.S. economy, federal regulators seized—and sold—the troubled Washington Mutual bank last night.
“Regulators simultaneously brokered an emergency sale of virtually all of Washington Mutual, the nation’s largest savings and loan, to JPMorgan Chase for $1.9 billion, averting another potentially huge taxpayer bill for the rescue of a failing institution,” reports the New York Times.
The sale of the bank is not expected to affect customers, but shareholders and some bondholders will lose the entire value of their investment, the newspaper writes.
Ordinarily, the story would be big news. But, in a sign of just how troubled the United States economy is right now, it caused only a relatively minor blip on the radar screens of the nation’s consciousness as everyone focuses on whether Congress will agree to some version of the $700 billion bailout legislation now under discussion, reports the Christian Science Monitor’s Global Credit Crisis Blog.
“WaMu’s $307 billion in assets outstrip the $40 billion affected in the 1984 failure of Continental Illinois National Bank, until now the largest US bank failure,” the blog post recounts. “Earlier this year, (the) IndyMac failure involved $32 billion in assets.”
Additional coverage:
Bloomberg: “WaMu Assets Sold to JPMorgan in Record Bank Failure”
Reuters: “FACTBOX- Key facts about Washington Mutual”
The Ticker (U.S. News & World Report): “Washington Mutual: Not the Last Domino”
ABAJournal.com: “1 Family + 43 WaMu Mortgages = $2.7M in Likely Lender Losses Since 2007”
ABAJournal.com: “Feds Probe Possible Fraud in IndyMac Bank Failure”
ABAJournal.com: “As Banks Reel, Regulation is Suddenly a Hot Topic”
