During the most dizzying days of the financial crisis, the biggest bank failure in American history took place.
Washington Mutual, a bank with hundreds of billions of dollars in its coffers, ran out of money.
The story of its final, brutal collapse in the fall of 2008—from the spate of acquisitions to the subprime mortgage exposure that fueled the bank’s growth, to the stock market gyrations and bank run that eventually brought the bank to its embarrassing and controversial end in its firesale to JPMorganChase—is an astonishing account of not only how one bank lost itself to greed and mismanagement, but how the entire financial industry and even the entire country lost its way as well.
Kirsten Grind’s The Lost Bank is a magesterial and gripping account of these events, tracing the cultural shifts, the cockamamie financial engineering, and the hubris and avarice that made this incredible story possible. The men and women who become the central players in this tragedy—the regulators and the bankers, the homebuyers and the lenders, the number crunchers and the shareholders—are heroes and villains, perpetrators and victims, often changing roles with one another as the drama unfolds.
As a reporter at the time for the Puget Sound Business Journal, Grind covered a story set far from the epicenters of finance and media. It took place largely in places such as suburban homes of central California and in office buildings of Seattle, but Grind covered the story from the beginning, and the clarity and persistence of her reporting earned her many awards, including being named a finalist for the Pulitzer Prize and the Gerald Loeb Award. She takes the readers into boardrooms and bedrooms, into triumphant celebrations and devastating bankruptcy hearings, into the power struggles that pitted regulators at the Office of Thrift Supervision and the FDIC against one another, and into the predatory negotiations of investment bankers and lawyers who enriched themselves during the bank’s rise, and then circled and devoured the decimated bank in its final days.
Written as compellingly as the finest fiction, The Lost Bank makes it clear that the collapse of Washington Mutual in 2008 was not just the largest bank failure in American history. It is a story of talismanic qualities, reflecting the incredible rise and the precipitous collapse of not only an institution, but of trust, fortunes, and the marketplaces for risk across the world. In Grind’s rendering, the story emerges as a cautionary tale of the financial industry’s capacity to improve lives and fuel the world’s endeavors, but also its spectacular capacity for ruin.
Released June 12, 2012 by Simon & Schuster
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