Items of Interest:
WaMu Excluded From ‘Too Clubby to Fail’ Group, Killinger Says -- Kerry Killinger, the former chief executive officer of Washington Mutual Inc., said his company became the largest bank failure in U.S. history in part because it was excluded from a group of financial institutions favored by U.S. policy makers.
Washington Mutual wasn’t protected from short sellers and the U.S. Treasury Department excluded the company from information sessions it held with competitors, Killinger said today in written testimony for the Senate Permanent Subcommittee on Investigations. The panel is holding the first in a series of hearings on the collapse of the financial system.
“For those that were part of the inner circle and were ‘too clubby to fail,’ the benefits were obvious,” Killinger, 60, said. “For those outside the club, the penalty was severe.” ...
For WaMu’s Killinger, Wall Street Was ‘Too Clubby to Fail’ -- Killinger says his Seattle thrift wasn’t “saved” like other financial institutions because it wasn’t part of the East Coast, Wall Street club:
“The Company was similarly excluded from hundreds of meetings and telephone calls between Wall Street executives and policy leaders that ultimately determined the winners and losers in this financial crisis. For those that were part of the inner circle and were “too clubby to fail,” the benefits were obvious. For those outside of the club, the penalty was severe.” ...Reuters blog:
Are some U.S. banks “too clubby to fail?” -- Can a bank be “too clubby to fail?” Former Washington Mutual boss Kerry Killinger thinks so — and reckons WaMu’s outsider status explains why it wasn’t bailed out in September 2008. The circumstances of the West Coast lender’s demise do raise legitimate questions. But if anything, WaMu was more sacrificial lamb than outcast...
Two Disgraceful Failures -- How Congress and the Financial Crisis Inquiry Commission are botching their only chance to reform Wall Street.
The Financial Crisis Inquiry Commission has so far been a waste. Some momentary theater has been provided by the witnesses who have tried to excuse, explain, or occasionally admit their role in the cataclysm of the past two years. While this has ginned up some additional public outrage, it hasn't deepened our knowledge about what critical players knew or did. There is a simple reason for this: The commission has not issued a single subpoena. Any investigator will tell you that you must get the documentary evidence before you examine the witnesses. The evidence is waiting to be seized from the Fed, AIG, Goldman Sachs, and on down the line. Yet not one subpoena...