re: #540 Anymouse 🌹

I just read up on the collapse of Washington Mutual - it went down like this (per Wiki):

By mid-September 2008, WaMu’s share price had closed as low as $2.00. It had been worth over $30.00 in September 2007, and had briefly traded as high as $45 in the previous year.[183] While WaMu publicly insisted it could stay independent, earlier in the month it had quietly hired Goldman Sachs to identify potential bidders. However, several deadlines passed without anyone submitting a bid.[16] At the same time, WaMu suffered a massive run (mostly via electronic banking over the internet and wire transfer[citation needed]); customers pulled out $16.7 billion in deposits in a ten-day span.[184]

This led the Federal Reserve and the Treasury Department to step up pressure for WaMu to find a buyer, as a takeover by the Federal Deposit Insurance Corporation (FDIC) could have been a severe drain on the FDIC insurance fund, which had already been hard hit by the failure of IndyMac that year. The FDIC ultimately held a secret auction of Washington Mutual Bank, which was won by JPMorgan Chase. On the morning of Thursday, September 25 (which happened to be the 119th anniversary of WaMu’s establishment), regulators informed officials at JPMorgan Chase that they were the winners.[16]

On Thursday night (shortly after the close of business on the West Coast), the Office of Thrift Supervision seized Washington Mutual Bank and placed it into the receivership of the FDIC. In a statement, the OTS said that the massive run meant that WaMu was no longer sound.[184] The FDIC then sold most of Washington Mutual Bank’s assets, including the branch network, to JPMorgan Chase for $1.9 billion. JPMorgan Chase agreed to assume the bank’s secured debts and liabilities to depositors. The transaction did not require any FDIC insurance funds.[185] Normally, bank seizures take place after the close of business on Fridays. However, due to the bank’s deteriorating condition and leaks that a seizure was imminent, regulators felt compelled to act a day early.[16]

Basically, there was an electronic bank run for a little over a week that precipitated WaMu’s seizure by the Feds.