Are the Feds laying the groundwork for yet another bank takeover? Citing sources, the New York Post
reported Wednesday that U.S. federal regulators have reached out to a number of banks gauging whether they would consider buying Washington Mutual Inc. if it should falter.
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Federal banking regulators in recent days contacted Wells Fargo & Co., J.P. Morgan Chase & Co, HSBC Holdings plc and several other financial institutions to weigh their interest in a possible acquisition of WaMu, the paper said. No merger discussions are currently underway between the Seattle-based bank and anyone else, sources told the paper.
WaMu, whose shares have traded as high as $39 this year, saw its stock tumble by 25% Tuesday before ending the trading day up by 16% to $2.32. The thrift has said its home loan losses could reach $19 billion through 2011, and analysts have speculated that it might have to raise more capital or eventually be forced to find a buyer.
Credit rating agency Standard & Poor's also cut WaMu's credit rating to junk status late Monday citing "increasing market turmoil." The agency, however, acknowledged that WaMu's deposit base appears to be stable and the company has enough liquidity to meet all fixed obligations through 2010.
Rumors about a pending takeover by J.P. Morgan have also surface, but nothing has come to fruition. -
Donna BlockSee Dealscape: Could WaMu be acquired by J.P. Morgan?See NY Post report
