Another one but this time its a Bank
- Wall Street suffers fresh blow as Washington Mutual collapses; JPMorgan buys bank’s assets for $1.9 b
- The US suffered the biggest ever bank failure in its history, with Washington Mutual, better known as WaMu, collapsing on Thursday.
- WaMu, the largest savings and loan institution and fourth largest bank in the US was seized by regulators and delivered into the hands of JP Morgan Chase. Under the government-brokered deal, JPMorgan will pay $1.9 billion to the banking regulator and acquire all insured and uninsured deposits, assets and some liabilities of WaMu’s banking operations, including its mortgage portfolio. The government had no choice. Shares in WaMu, with its large exposure in home mortgages, credit cards and other retail lending products had become almost worthless in the past few months. As retail depositors’ fears grew, people began to withdraw money, forcing the Office of Thrift Supervision, WaMu’s main regulator in the US fractured regulatory system, to close it down.
- In the US, where over 600,000 jobs have been lost this year and 9.4 million people are estimated to be currently looking for employment.