R.I.P Washington Mutual
September 26, 2008
The largest failure of any U.S. bank is now Washington Mutual, Inc. which was closed by the U.S. government on Thursday.
WaMu’s banking assets were then sold to JPMorgan Chase & Co.
WaMu, which is the largest US savings and loans company, was one of the hardest hit by the recent financial crisis.
The sale of WaMu yesterday marked the largest in US history.
The Office of Thrift Supervision said, “With insufficient liquidity to meet its obligations, WaMu was in an unsafe and unsound condition to transact business.”
Though it was added that customers “should expect business as usual on Friday, and all depositors are fully protected.”
According to regulators, WaMu has about $307 billion of assets with $188 billion of deposits.
As for JPMorgan, it will now become the second largest bank in the country with $2.04 trillion of assets. It only follows Citigroup.
Bank of America will soon reach the top spot as soon as it completes its purchase of Merrill Lynch & Co.
With so many banks going under, it’s hard to deny the economy is about to see a re-run of the “GREAT DEPRESSION”.
And, with Washington debating over the $700 billion bailout of the financial services industry, the crumbling of even more banks isn’t helping.
Shane Oliver, head of investment strategy at AMP Capital in Sydney, says, “It removes an uncertainty from the market. The problem is that markets are in a jittery stage. Washington Mutual provides another reminder how tenuous things are.”
WaMu has 2,239 branches and over 43,000 employees. It’s still unclear how many people will lose their jobs.
It’s a sad day for WaMu, especially considering that they’ve been around for 119 years!