Meanwhile, Morgan Stanley and Goldman, the two investment banks left standing, were under immense funding pressure. One week after Lehman, they were rescued by the transparent expedient of redesignating them as commercial bank holding companies so that they might benefit from the protection of FDIC deposit insurance. But that only increased the burden on the FDIC, which had problems of its own. On September 25 the FDIC closed, broke up and sold off Washington Mutual. With $244 billion in mortgages on the balance sheet, WaMu was the largest commercial bank in American history to fail. J.P.
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