Washington Mutual files for bankruptcy

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US financial crisis deepened further with 119-year old banking institution Washington Mutual deciding to file for bankruptcy protection after selling its banking operations to JPMorgan Chase.

Washington Mutual, which has an asset of over USD 300 billion, will be the second major financial entity after Lehman Brothers to file for bankruptcy protection. The fall of Washington Mutual, popularly known as WaMu, is being viewed as the biggest banking failure in the American history.

"Washington Mutual Inc announced that it has, together with its wholly-owned subsidiary WMI Investment Corp, commenced voluntary cases under Chapter 11 of the United States Bankruptcy Code," a statement released by Business Wire said.

WaMu, according to reports, was expected to lose around USD 19 billion on bad mortgages.

Credit agency Standard and Poor's has already slashed its rating to eight level below investment grade.

Earlier the US administration has seized WaMu and sold its banking operation to JPMorgan Chase for USD 1.9 billion.

The American financial turmoil triggered by subprime mortgage crisis has taken a heavy toll on the global financial system, even as the US government is trying to work out a USD 700 billion bailout package.

Apart from forcing Lehman Brothers, WaMu and IndyMac Bancorp into bankruptcy, the crisis has driven US's sixth largest bank, Wachovia, which has an asset base of over USD 800 billion, to look for a buyer.