The Downfall of Washington Mutual

Case Code: BSTR328 Case Length: 17 Pages Period: 2006-2008 Pub Date: 2009 Teaching Note: Not Available

Price: Rs.300 Organization: Washington Mutual Inc. Industry: Banking & Financial Services Countries: USA Themes: Failure of Strategy, Bankruptcy

Abstract Case Intro 1 Case Intro 2 Excerpts

Abstract

The case describes the growth of Washington Mutual Inc. (WaMu), one of the largest financial institutions in the US, and its eventual collapse, which led to the sale of its banking operations to JPMorgan Chase & Co. (Chase).

It provides a brief overview of the history of WaMu, and then discusses its rapid expansion through various acquisitions, beginning in the 1990s. Later, the case covers the impact of the economic crisis in the US on WaMu, and discusses the events leading up to its collapse.

Issues

The case is structured to achieve the following teaching objectives

• Understand the importance of proper control systems in a company
• Understand the role of the top management in setting the direction for a company

Contents

Introduction
Background Note
Decline and Fall
Reasons for the Fall
After the Fall
Exhibits

Keywords

WaMu, JPMorgan Chase, Bank failures, Sub prime crisis, Economic crisis, Sub prime mortgages, Mortgage-backed securities (MBS), Jamie Dimon, Control systems, Risk management, Kerry Killinger

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