Washington Mutual says its operations are not dependant on commercial paper

July 24, 2008 by · Leave a Comment
Filed under: Industry News 

Bloomberg reported that the largest U.S. savings and loan bank based out of Seattle, Washington is not reliant on commercial paper to fund its banking operation. After the record losses they have posted in recent quarters and the failure of the California bank of IndyMac, much criticism has been given to WaMu the last couple of weeks. This has fueled much speculation that the Seattle bank would be next to have a crisis in the coming weeks.

Even in my reading of other discussions about the U.S. banking industry in general, many pundits and analysts have also mention that they feel WaMu is “not too big to fail” and could meet the same fate as IndyMac or other regional banks. They do on the other hand have a strong deposit base so in was a good move to make this statement to reduce the amount of speculation.

Here is what the article said:

Washington Mutual Inc., the biggest U.S. savings and loan, said it does all of its business through banking operations and “does not rely on commercial paper.”

Washington Mutual responded, in an e-mailed statement, to a report from Gimme Credit LLC today, which said unsecured creditors of the Seattle-based company were “pulling funds.” The report cited a decline in federal funds purchased and commercial paper.

Bloomberg Link

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