Financial Times FT.com

Washington Mutual presents fresh test

By Krishna Guha in Washington and Joanna Chung in New,York

Published: September 15 2008 03:00 | Last updated: September 15 2008 03:00

Attention has focused on the danger presented by the failure of Lehman Brothers. But as the UK discovered during the Northern Rock crisis, the fall of a commercial bank can have systemic consequences if it threatens a run on other weak lenders.

In the US, Washington Mutual - the sixth largest bank - has lost more than a third of its market value in the past week as investors fear it lacks liquidity and capital to survive the credit crisis.

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