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Behind-The-Scenes Look At The People And Decisions That Led To WaMu’s Failure

Thursday, August 16, 2012 - 5:30 PM
It has been almost 4 years since WaMu failed. It's the largest U.S. bank that has ever failed. This Q&A with the WSJ reporter Kirsten Grind who wrote about WaMu's failure in the book “The Lost Bank” provides some interesting insights. Here's one interesting Q&A:
I have the sense that the Federal Deposit Insurance Corp. (FDIC) was afraid of what might happen if its insurance fund had to cover for the failure of a bank as large as WaMu.

That played a huge role. Sheila Bair, then the chairman of the FDIC, was very focused on protecting the deposit insurance fund. And rightly so, because we were at the start of what would turn into a very long stretch of bank failures. If WaMu failed, it would have wiped out the fund. But she was so focused on that to the exclusion of everything else that it prevented her from seeing opportunities to save WaMu.

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On the 2-year anniversary of the failure I wrote this post, A Look Back from a Depositor's Point of View.
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Ken TuminKen Tumin5,473 posts since
Nov 29, 2009
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