Let’s remember when the federal government seized WaMu, on this day in 2008 (September 25)
Washington Mutual was the largest bank failure in the history of the US. It collapsed in 2008, after being in business for 119 years. It was bad. And exactly 11 years ago, it was seized by the feds.
HistoryLink has the details:
On the afternoon of September 25, 2008, Washington Mutual, the nation’s largest savings and loan bank, is seized by the federal Office of Thrift Management. It is the largest bank failure in United States history. Regulators quickly sell Washington Mutual to JPMorgan Chase & Co., which has long sought to acquire it. The collapse of WaMu is directly linked to subprime mortgages and other poor-quality loans that characterized the national housing boom the bank helped create in the early years of the twenty-first century and comes as President George W. Bush and Congress attempt to craft a $700 billion bailout of the stricken U.S. financial industry.
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The bulk of WaMu’s 43,200 employees nationwide appeared likely to become JPMorgan workers. At WaMu headquarters in the landmark Washington Mutual Tower at 1201 3rd Avenue in Seattle, however, the outlook for 3,500 employees was somewhat dimmer. “The entirely predictable consequence of this deal for Seattle will be the loss of thousands of well-paid jobs, hundreds of thousands of square feet of office space emptied out, and a serious downshifting of local giving,” a Seattle business columnist wrote. “It’s devastating, said Greater Seattle Chamber of Commerce President Steve Leahy.
The WaMu collapse also was devastating for equity investors who had held on to the end and for bondholders. Both were wiped out. WaMu stock, which had traded as high as $45.91 a share in 2006 stood at 16 cents when the New York Stock Exchange halted trading in the shares.
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