Wamu goes down under

Considered to be the biggest bank failure in American history, WaMu (Washington Mutual Bank) the FDIC claimed WaMu's assets and then sold most of the companies to JP Morgan, now the second largest bank in America. The fall of the bank is due to several factors. After the fall of The Leham Brothers, WaMu customers withdrew earnings approximating 16.7 billion dollars in a ten day period. The panic and uncertainty which caused this massive money withdrawal, left Wamu unable to liquidity their assets.

In the long run, WaMu's failure was due to the mismanagement and misinformed bets on the mortgage market. Due to their risky debts and tumbling mortgages, JP Morgan has dropped the loan portfolio to 31 billion. This however can change if the company decides to take advantage of the bailout IF it goes through.

For current WaMu customers, you are still able to resume regular banking. According to Shelia Bair, (FDIC chairman) what this means for customers is the combination of two banks.

For an in depth article on WaMu's fall, read article