Originally published by the Voice of America (www.voanews.com).
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September 26, 2008

JP Morgan Chase Buys Troubled Washington Mutual Bank
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http://enews.voanews.com/t?ctl=1E6301F:5F753BCA39991A3BD39278C1192FA87EF47489ACC27D21EE&
 
Federal regulators move quickly, seizing troubled mortgage lender late
Thursday and selling thrift's banking assets to US investment bank for
nearly $2 billion 
As U.S. lawmakers grappled over a $700 billion dollar bank bailout plan,
one of the nation's largest banks - Washington Mutual Incorporated -
collapsed under the weight of its enormous bad bets on the U.S. mortgage
market. From Washington, VOA's Purnell Murdock reports on what is seen
as the largest bank failure in U.S. history. Pedestrians walk past
Washington Mutual Inc. branch in downtown Seattle, Washington (file
photo)With financial markets reeling over the recent crisis on Wall
Street, the collapse of Seattle-based Washington Mutual could not have
come at a worse time. Federal regulators moved quickly, seizing the
troubled mortgage lender late Thursday and selling the thrift's banking
assets to U.S. investment bank J.P. Morgan for nearly $2 billion. The
Federal Deposit Insurance Company, FDIC, insures Americans' bank
deposits of up to $100,000. But it says because of the deal it will not
have to use its assets to cover Washington Mutual's deposits. The FDIC
had already!
  spent billions of dollars in its takeover of Indy Mac, which collapsed
in July. Some analysts say a Washington Mutual failure could have used
up half the money in the government insurance fund. J.P. Morgan Chase
said it plans to close less than 10 percent of the two companies'
branches. The bank has not yet decided which to close. Kelsey Wesley, a
Washington Mutual employee says employees are nervous. But adds the
company, commonly known as Wa Mu, has been good to them in the past.
"I'm not gonna say that is not gonna happen but no matter what Wa Mu has
a really impressive severance package and I think that's going to be
carried on even if there is a merger," he said. John Graybill, another
Washington Mutual employee said he is optimistic."Of course we are going
to have some uncertainties and some questioning about what's going on.
Have I been nervous? Sure. That's the nature of the whole beast," he
said. "When a large company gets bought out you wonder about your job.
Are!
  heads gonna roll? You just don't know but we have faith in our bosses

 and the people upstairs." FDIC Chairwoman Sheila Bair says this will be
a seamless transition for the bank's customers. She says there will be
no interruption in services and bankers can expect business as usual.
Washington Mutual has been saddled with billions of dollars of debt
because it heavily invested in selling risky subprime mortgages to
customers who later defaulted on them. This is J.P. Morgan's second
purchase of a financial institution left vulnerable by the subprime
mortgage crisis. It bought Bear Stearns for more than two-billion
dollars earlier this year.


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