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.
By the end of 2009, about 100 U.S. banks with collective assets of more than $800 billion will fail, predicts Christopher Whalen, managing director of Institutional Risk Analytics, a Torrance, California-based firm that sells its analysis of FDIC data to investors
that the FDIC forced a sale of Washington Mutuals deposit accounts to JP Morgan Chase. No further detail has been released yet. Recently, Wamu's debt fell into junk status. Wamu had been looking for partners or acquirers for the entire operation, yet no one wanted to bite. The bank was one of those who was hardest hit by the mortgage meltdowns, resulting in the resignation of some of it's management.
I would not rule out the possibility that at some point we may need to tap into (short-term) lines of credit with the Treasury for working capital, not to cover our losses, -- Chairman Sheila Bair
They also are considering raising premiums in October. Bair also is planning on charging higher premiums to the more risky banks:
The agency also plans to charge banks that engage in risky lending practices significantly higher premiums than other U.S. banks
This is pretty early in the game to be borrowing money. According to these reports the FDIC has only borrowed money at the tail end of the S&L crisis in the 80's.
Today is all DNC, all of the time to the point one is about to get absolutely nauseated listening to these 24/7 Cable pundit talking heads rambling on like Charlie Brown's teacher ...
so it's a very good time to release some bad news right?
The Federal Deposit Insurance Corp said on Tuesday it now expects IndyMac's failure in July to cost its insurance fund $8.9 billion, compared with the previous expected range of $4 billion to $8 billion
This looks like some sane and welcome news. Appears FDIC is going to restructure mortgages, lowering interest and payments for people who have housing financing at the failed IndyMac.
The FDIC suspended foreclosures originating from IndyMac and they are managing $15B of mortages.
The FDIC, which is running IndyMac while seeking a buyer, may also extend repayment terms or base payments on reduced principal to help borrowers, FDIC Chairman Sheila Bair said today in a conference call with reporters. The program might serve as a ``catalyst to promote more loan modifications for troubled borrowers throughout the country,'' Bair said.
Banks holding volatile deposits gathered by third parties may be charged higher premiums to bolster the fund used to insure deposits at failed banks, the head of the Federal Deposit Insurance Corp said on Friday.
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