Washington Mutual collapses

As the debate over the US$700 billion bank bailout rages on in Washington, one of the nation\'s largest banks, Washington Mutual Incorporated (WaMu) has collapsed under the weight of its enormous bad debts on the mortgage market.



The Federal Deposit Insurance Corporation yesterday took over the bank and then sold the thrift\'s banking assets to JPMorgan Chase & Company.



Seattle-based WaMu, which was founded in 1889, is the largest bank to fail by far in the country\'s history.



Its US$307 billion in assets eclipse the 40 billion of Continental Illinois National Bank, which failed in 1984, and the 32 billion of IndyMac, which the government seized in July.



WaMu is JPMorgan Chase\'s second acquisition of a major financial institution hobbled by losing bets on mortgages this year.



In March, JPMorgan bought the investment bank Bear Stearns for about 1.4 billion, plus another 900 million in stock ahead of the deal to secure it.



The downfall of WaMu has been widely anticipated for some time because of the company\'s heavy mortgage-related losses.