A smooth transition
by Hu Yoshida on Sep 26, 2008
Last night I stopped at an ATM after work to withdraw money to take my wife to dinner. When I got back in the car and turned on the radio, I heard the news about Washington Mutual’s buy out by JPMC. It was a shock to me since I have been a long time customer of WAMU. While I knew of the mounting problems for WAMU, I chose to keep my funds there to support my bank.
This was the largest bank failure in the United States and many were surprised that this was done on a Thursday evening instead of the usual after market close on Friday. But unlike the IndyMac failure in June, where depositors were locked out of the banks and ATMs over the weekend, everything was open for business on Friday.
I was surprised and relieved that the changeover occurred so seamlessly from the perspective of a depositor. I had no problems withdrawing funds at the ATM and have confidence that the rest of my meager funds are safe. I am grateful to JPMC for taking over WAMU and eliminating the need to dip into the FDIC deposit insurance fund. The speculation is that most of the branches will continue to be operated under JPMC, which is good news for the folks I know in my local branch. The biggest layoffs will occur in WAMU Headquarters. I expect that the IT staffs will remain in place as they are critical to maintaining a smooth transition. The service that I experienced during this transition was enabled by the IT operations at WAMU and JPMC working together. Any outages, especially at this time, would be doubly disastrous in terms of public confidence.
Today the press is full of the news about the intervention of the FDIC and the sale to JPMC for $1.9 B. Today WM closed down at $0.16 and JPMC closed up $4.87 at $48.24. So even in these times there are winners as well as losers. While I don’t feel like a winner, I am thankful that I am not a loser.
This is a critical time for the US economy at large, like you I’m relieved to see JP take over Wamu!