Case Study - Washington Mutual

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Question - Case Study - Washington Mutual

2004 Embarked upon a lending strategy to pursue higher profits by emphasizing high risk loans

2006 High risk loans began incurring high rates of delinquency and default,

2007 Mortgage backed securities began incurring ratings downgrades and began incurring losses due to a portfolio that contained poor quality and questionable customers. (Source: Wall Street and the Financial Crisis: Anatomy of a financial collapse began incurring losses due to a portfolio that contained poor quality and fraudulent loans and securities. Its stock price dropped as shareholders lost confidence and depositors began withdrawing funds, eventually causing a liquidity crisis at the bank)

2008 Seized by its regulator, the Office of Thrift Supervision (OTS) Placed in receivership with the Federal Deposit Insurance Corporation (FDIC) Sold to JPMorgan Chase for $1.9 billion.

What led to the failure of the said institution looking at business, financial and internal risks?

Reference no: EM133038410

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