Regulators failed badly with Washington Mutual
U.S. regulators did not properly supervise Washington Mutual Inc, even as the savings and loan began to crumble because of the subprime mortgage crisis, a federal investigation concluded, the New York Times reported.
Seattle-based Washington Mutual became the biggest bank failure in history when it filed for bankruptcy in September 2008 at the height of the global financial crisis. Regulators then seized the operation before selling it to JPMorgan Chase & Co for $1.9 billion.
The Times reported the investigative report found that two agencies overseeing Washington Mutual "feuded so much that they could not even agree to deem the company 'unsafe and unsound' until September 18, 2008" -- when it was too late to save the bank.
This report basically confirms that the Office of Thrift Supervision is useless. Right up until WaMu failed, the OTS was trying to avoid marking WaMu's bank condition rating down.
Jay