WaMu failure 'largest-ever US banking collapse'

29 September 2008

The biggest banking failure in American history occurred yesterday, with the collapse of Washington Mutual.

JPMorgan has agreed to buy up most of the assets of the Seattle-based lender, which has been suffering from the deteriorating markets and concerns over its financial stability over recent weeks.

The deal comes to around $1.9 billion - and came about after WaMu was taken into the control of regulators.

WaMu encompasses around $307 billion in assets, making it the largest ever failed bank in the US.

The bank's depositors, who have withdrawn over $16 billion from it over the past week and a half due to the stability concerns, were assured that the business will not be affected.

"For bank customers, it will be a seamless transition," said Stella Blair, chairman of the Federal Deposit Insurance Agency.

She added: "Bank customers should expect business as usual come Friday morning."

The previous largest-ever bank failure was Continental Illinois, which required a government bailout in 1984.


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