giant sucking sound continues

The failure of the Seattle-based bank Washington Mutual undermined confidence in a fresh clutch of US household names today, as investors digested the implications of the biggest collapse of a high-street bank on record.

Wachovia, a national chain with 3,000 branches and assets of $812bn (£441bn), saw its shares dive by 21% during early trading in New York, while National City Corporation, a regional bank based in Ohio, suffered a sell-off which pushed its stock down by 27%.

…Details emerged of the extent of a run on the assets of Washington Mutual, known as WaMu, in the days leading up to its demise. The Office of Thrift Supervision said customers withdrew $16.7bn of deposits in 10 days, beginning on September 15 - the day Lehman Brothers declared itself bankrupt, sparking a crisis of confidence in the broader banking system.

China bails:

Chinese regulators have told domestic banks to stop interbank lending to U.S. financial institutions to prevent possible losses during the financial crisis, the South China Morning Post reported on Thursday.

Irony sidebar: part of the general China Story has been that Chinese banks are perpetually on the point of failure due to their non-performing loan burdens. Looks like they’re learning.

Comments

[Fellow Traveller]

Well, it's the domestic not commercial banks they've instructed. The Chinese government doesn't want its own people pulling their money out of their local accounts because they fear it will disappear into the giant hole where the USA used to stand.