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It’s very common for a larger bank to buy out a smaller bank, even if it is nominally bankrupt. Sometimes the government steps in and helps out by providing var
by sgerenser 4y ago
It’s very common for a larger bank to buy out a smaller bank, even if it is nominally bankrupt. Sometimes the government steps in and helps out by providing various guarantees or short term funding. This is nominally a bailout, but may actually save taxpayers money by not having to involve the FDIC. See: WaMu being bought out by JPMorgan Chase for $1.9 Billion in the 2008 crisis.
- aliljet 4y agoWasn't this a famously bad transaction for JPM?
- sgerenser 4y agoThis retrospective analysis (1 year after the transaction) shows it was probably a reasonable, although not great, deal: https://www.fool.com/investing/general/2009/09/25/jpmorgan-and-wamu-was-it-a-good-deal.aspx https://www.fool.com/investing/general/2009/09/25/jpmorgan-a... Chase getting a whole bunch of branches in the Southeast and Washington state for practically free probably left them better off in the long run.
- MrMan 4y agoit was a tiny deal in terms of the outlay, and I think it was positive to natural long term. not a very risky move for JPM