Washington Mutual: The bank just big enough to fail
People walk past Washington Mutual Inc.'s headquarters September 16, 2008 in Seattle. The savings and loan bank had its credit rating reduced to junk status by Standard and Poor's.
Washington Mutual was a bank headquartered in Seattle, Wash. After a good old-fashioned run on deposits on Sept. 25, 2008, the bank went bust. But "no depositor of WaMu was wiped out" says Grind. The FDIC stepped in and sold the bank to JPMorgan Chase. Anyone with a WaMu ATM card would have found no disruption in their accounts -- they lost not a single penny.
Grind says she was surprised that WaMu didn't get much attention at the time, nor has it been mentioned much since 2008. By late September of that year, Lehman Brothers had already gone bankrupt while Fannie Mae and Freddie Mac had been taken over by the U.S. Treasury -- it was easy to miss a bank collapse that seemed to hurt no one.
The only folks still suffering since WaMu's collapse are perhaps the company's leadership, says Grind. The government's TARP program was announced only six days after WaMu went bust -- six days too late to save the bank.