Billion-dollar bailout for US bank
July 13, 2008
FEDERALLY-SEIZED IndyMac Bank is due to reopen tomorrow after suffering one of the biggest bank closures in US history, as the troubled US mortgage industry struggles to stem further meltdown.
The regulatory Office of Thrift Supervision (OTS) announced yesterday it had placed the California-based bank, worth an estimated $US32 billion ($A33.3 billion), under the control of the Federal Deposit Insurance Corporation (FDIC).
The mortgage lender, which will re-open as IndyMac Federal Bank, marked the largest bank failure in a year of mortgage and foreclosure crisis highlighted by a surge in defaults and a plunge in housing prices which are rippling through the US economy.
The FDIC stressed today it was seeking to return the bank to private operation within a few months.