Changes

==Collapse of #6 and #4 largest banks==

==Collapse of #6 and #4 largest banks==

Also on Sept. 25, Washington Mutual, the 6th largest bank in the US with $310 billion in assets, went [[bankrupt]] after a run in which depositors withdrew $17 billion in a few days. Its stockholders lost all their money, the US government took it over (through the [[FDIC]], which insures ordinary bank deposits), and resold it the same day to the biggest New York bank, JPMorgan Chase. It was the largest commercial bank failure in American history, by far. Meanwhile the #4 U.S. bank, Wachovia, burdened by $120 billion in toxic securities,<ref> At the height of the bubble in 2006 Wachovia purchased  Golden West Financial, a California lender specializing in so-called pay-option mortgages that enabled people to buy houses for a much higher price than they could afford, hoping that rising house prices would allow them to refinance later.</ref> was bought out by Citigroup on Sept. 29 in a deal engineered by the FDIC.<ref>In the [[Great Depression]], no major banks failed in any major cities, although over 6000 small neighborhood and rural banks went under; depositors eventually received on average 85% of their deposits.</ref> The upshot was concentration of  Americans’ bank deposits in the hands of just three banks: Bank of America, JPMorgan Chase and Citigroup.

O)n Sept. 25, Washington Mutual, the 6th largest bank in the US with $310 billion in assets, went [[bankrupt]] after a run in which depositors withdrew $17 billion in a few days. Its stockholders lost all their money, the US government took it over (through the [[FDIC]], which insures ordinary bank deposits), and resold it the same day to the biggest New York bank, JPMorgan Chase. It was the largest commercial bank failure in American history, by far.<ref>In the [[Great Depression]], no major banks failed in any major cities, although over 6000 small neighborhood and rural banks went under; depositors eventually received on average 85% of their deposits.</ref>

 

Meanwhile the #4 U.S. bank, Wachovia, burdened by $120 billion in toxic securities,<ref> At the height of the bubble in 2006 Wachovia purchased  Golden West Financial, a California lender specializing in so-called pay-option mortgages that enabled people to buy houses for a much higher price than they could afford, hoping that rising house prices would allow them to refinance later.</ref> was bought out by Citigroup on Sept. 29 in a deal engineered by the FDIC.  The upshot was concentration of  Americans’ bank deposits in the hands of just three banks: Bank of America, JPMorgan Chase and Citigroup.

==See also==

==See also==