Via Calculated Risk:
JPMorgan Chase acquired the banking operations of Washington Mutual Bank in a transaction facilitated by the Federal Deposit Insurance Corporation. All depositors are fully protected and there will be no cost to the Deposit Insurance Fund.
"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
According to those who thought the FDIC was insolvent, the failure of WaMu was supposed to be the cause of death. Instead, the FDIC incurred exactly $0 in costs to its insurance fund from the failure.
Chalk another success up to a New Deal institution. Right now, the biggest risk to FDIC solvency is the possibility that the Wall Street bailout of $700 billion will pass, creating tremendous fiscal stress on the budget for years to come, should the FDIC ever subsequently need to make use of its $30 billion line of credit with the US Treasury,
That's good news
but previous post is talking about future failures.
I like the idea of a buy out of the deposits only to avoid the FDIC, this was a clever move.
One way to shed toxic paper.
Gotta love that New Deal
CEO on job 17 days gets $20 Million dollars
$20 million dollars and the board approved this when in essence, WaMu just failed and only because they had just large deposits did JPMorgan buy those (only those) out @ $1.9 billion and they are worth much, much more than that.
not off the hook
WaMu files bankruptcy but it appears that triggered billions in CDOs which now must be paid.