The slow motion collapse of the US financial system continues with yet another bank failure being announced:
Washington Mutual Inc. was seized by the Federal Deposit Insurance Corp. in the largest failure ever of a U.S. bank, after which JPMorgan Chase & Co. Inc. came to its rescue by buying the thrift’s banking assets.
JPMorgan Chase took over all deposits, so Washington Mutual account holders did not lose any money – thankfully! However equity and preferred shareholders were wiped out as a result of this deal.
I have no doubt that this event will spook a lot of people – it may even cause a run on the banks! I bet a lot of people are now wondering if their bank is sound.
The question now is , which will be the next bank to fail?