How will the massive US bank failures impact innovation? A lot. Banking news isn’t typically important in our isolated world of innovation, but the reality is that bank failures will impact innovation budgets and consumer preference.
JPMorgan Chase & Co have just become the biggest U.S. bank by deposits with 5,410 branches in 23 USs states after acquiring Washington Mutual Inc.’s branch network for $1.9 billion. Following its closure by the US government, the Washington Mutual financial woes are being labeled as the “largest U.S. bank failure in history”.
Washington Mutual, WaMu, is the latest victim of the credit crisis which recently drove Lehman Brothers Holdings Inc. and IndyMac Bancorp out of business.
Washington Mutual was shut out by the US government’s federal Office of Thrift Supervision after the withdrawal of more than $16.7 billion since September 16 by WaMu customers.
The federal Office of Thrift Supervision explained their decision, “With insufficient liquidity to meet its obligations, WaMu was in an unsafe and unsound condition to transact business.”
Business is expected to be back to normal on Friday September 26.