May 21: DvD Insights - Lesson 2 from Failures in Silo Risk Management, Washington Mutual Inc.
Location: Honolulu
Author:
Date: Thursday, May 21, 2009
Unlike Countrywide Financial, which struck its rescue deal with Bank of America in January 2008, Washington Mutual, Inc. survived longer into the credit crisis. Its subsidiary bank and thrift were seized by the FDIC and resold to J.P. Morgan Chase & Co. on September 25, 2008, shortly after Kerry Killinger was ousted as Wamu CEO. The purpose of this post is not to lay blame. It's in the tradition of an "incident report" in the military, or an autopsy. A patient who shouldn't have expired did in fact pass away. Why did this happen, and what needs to be done to prevent it from happening in the future? This post uses 10-k information from Wamu, supplemented with stories from risk managers in the know, to explain what happened.
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