Washington Mutual Bank Failure
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Why I wrote this article

I wrote this to answer children's question about what happened at the bank. If you have a question, please feel free to leave it as a comment.


Main Article

Washington Mutual Savings Bank used to be the 6th largest bank in the United States. Sometimes it was called Wamu for short. On Thursday, Sept. 25, 2008, the United States government took over the bank. It sold the banking business to a company called JPMorgan Chase. This was the by far the largest bank failure in U.S. history. According to Washington Mutual's 2007 statement to the government (SEC filing), it had $327.9 billion of assets in 2007.

The government took over the bank because the government was worried that the bank might run out of money. The bank was running out of money because many people who had savings at the bank took the money out. They took the money out because they were afraid that if the bank closed they would lose their money. (This is called a "bank run" or a "run on a bank.")

On Friday, Sep. 26, 2008, Washington Mutual bank branches opened for business the way they normally do.

In the future, Washington Mutual bank branches were be named Chase Bank.

Q. It was the sixth largest bank in terms of what?
A. It was the sixth largest bank in terms of lending money for people to buy houses. The money lent to buy a house is called a mortgage. In 2007, WaMu was the nation's sixth-largest U.S. mortgage lender and 11th-largest subprime lender, according to the newsletter Inside Mortgage Finance.
http://www.javno.com/en/economy/clanak.php?id=138382

For more information, see
http://en.wikipedia.org/wiki/Washington_Mutual

This is the letter that Wamu customers found at the bank on Friday.


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