Thursday, September 25, 2008

Report: U.S. seizes Washington Mutual (WM)

From UPI:
The U.S. government Thursday took over struggling savings and loan Washington Mutual (NYSE:WM) in the largest bank seizure in U.S. history, officials said.

The New York Times (NYSE:NYT) reported.

The government has begun selling off pieces of the institution to JP Morgan Chase in what The New York Times, citing people briefed on the plan, called an emergency transaction intended to protect taxpayers from being saddled with a bill for another bank....MORE


JPMorgan Chase acquired the troubled thrift Washington Mutual Inc., the Federal Deposit Insurance Corporation announced late Thursday, marking yet the latest stunning development in the ongoing credit crisis.

Under the deal, which was arranged by federal banking regulators, JPMorgan Chase will acquire all the banking operations of the Seattle-based WaMu, as well as its assets and financial contracts....

...The Office of Thrift Supervision shut down the bank on Thursday and named the FDIC as receiver.

"For bank customers, it will be a seamless transition," said FDIC Chairman Sheila Bair. "There will be no interruption in services and bank customers should expect business as usual come Friday morning,"...

...Federal regulators were quick to point out Thursday evening that the WaMu-JPMorgan Chase deal would not have any impact to its insurance fund which covers customer deposits when banks fail.

"WaMu's balance sheet and the payment paid by JPMorgan Chase allowed a transaction in which neither the uninsured depositors nor the insurance fund absorbed any losses," Bair said....