Released: September 26, 2008

WaMu sold to Chase

Source: E. Scott Reckard & Tiffany Hsu, L.A.Times (Free Registration)

In the biggest bank failure in U.S. history, Washington Mutual Bank was seized late Thursday by federal regulators and immediately sold to JPMorgan Chase & Co. for $1.9 billion.

Customer deposits will be secure, regulators said, but shareholders of the nation’s largest savings and loan will see what’s left of their holdings wiped out. WaMu shares have lost 88% of their value this year amid huge losses in the bank’s mortgage loan and credit card businesses.

Although not unexpected, the failure is the latest in a series of collapses that have shaken the financial world and may add new urgency to efforts by Congress and the Bush administration on a $700-billion financial sector bailout plan.

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