The acquisition would create largest US depository institution with over $900 billion of customer deposits, financial services firm, a JPMorgan statement said. However, the transaction excludes senior unsecured debt, subordinated debt and preferred stock of Washington Mutual's banks, it added.
Unlike any other business, banking is a turf where the captain's role is the most critical. Often a bank is defined by the personality of the CEO who runs it. Both HDFC Bank and Kotak Mahindra Bank are the creation of their CEOs, notes Tamal Bandyopadhyay.
The difference between what the banks play in the US and India is not that of soccer and football but rugby and football. SVB also has a unique character. But when risks are mispriced, the fallout could be very similar, points out Tamal Bandyopadhyay.
JP Morgan Chase is planning to slash nearly 21 per cent of workforce and lay off 4,000 employees by January at Washington Mutual, which was acquired by the investment banking major in September.
Ten public sector banks and two private banks have an exposure of $1.08 billion to US financial majors Wachovia Corporation, Washington Mutual, AIG, Lehman Brothers and a European financial institution Fortis. About $445.60 million was fund-based exposure, while $634.20 million was non-fund based exposure.
The US market regulator Securities and Exchange Commission was doing what it could to stem the flow. It temporarily prohibited naked short-selling in the securities of major financial players including Freddie Mac and its sister firm Fannie Mae in July. But this didn't really help. It was only after global central banks pumped in unprecedented liquidity into global markets, that the storm was finally calmed.
Tamal Bandyopadhyay, columnist and author of several books like From Lehman to Demonetisation: A Decade of Disruptions and Sahara: The Untold Story, tells Rediff.com why Yes Bank depositors should not panic and the current crisis at India's fifth largest private lender does not pose any systemic risk.
US President Barack Obama's administration has faced extensive criticism for its failure to prosecute bankers criminally for behavior that led to the financial crisis.
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