Historian says WaMu failure not the biggest in US history





The failure of Washington Mutual put at risk $1.9bn in assets, or $1,900,000,000.

US GDP today is about $13,800bn, or $13,800,000,000,000.

The assets put at risk represent therefore around .01% of GDP. Which is a big deal, and we’re glad for the FDIC and JP Morgan Chase.

Consider, though, the failure in 1930 of Bank of United States. (Note: the absence of definite articles is critical, this was a private bank, not an official entity.) It’s supposed to have put at risk maybe $160m, or $160,000,000.

Which makes it sound smaller than the failure of WaMu, widely described today as the largest bank failure in US history.

But US GDP in 1930 was around $91.2bn, or $91,200,000,000.

So the 1930 failure put at risk perhaps .18% of GDP.


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