Washington Mutual may face increased costs to keep the confidence of depositors, say analysts, after the largest US savings and loan institution was downgraded to junk by both Standard & Poor's and Moody's.
"This week and next will be the moment of truth for WaMu," said Fred Cannon, an analyst at Keefe Bruyette & Woods. "Their primary sources of liquidity are retail deposits and advances from the Federal Home Loan Banks [FHLB] but, now they are junk-rated, WaMu may have to pay more to encourage depositors."
