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So much for the “grand plan”. Each attempt by the US authorities to prop up the financial system has pulled rocks from under its foundations. On Thursday night, the Federal Deposit Insurance Corporation descended to carve up Washington Mutual. After the Office of Thrift Supervision ordered the closure of the largest US thrift, the meat of WaMu’s business was immediately sold to JPMorgan Chase for a mere $1.9bn.

Savers precipitated the crisis by quietly removing their cash from WaMu. Nearly 10 per cent of the thrift’s deposits, mostly amounts above the FDIC’s insurance limit, had walked out of the door in eight days. Moving quickly was necessary to reassure depositors, both at WaMu and other wobbly banks, that their nest eggs are safe.

However, lawyers, bankers and regulators are again swimming in uncharted waters. Normally the FDIC steps in to save banks on a Friday night. Another bank is found to absorb deposits and branches while remaining assets are used to meet liabilities to bondholders. This time, there is barely anything left.

JPMorgan, now the largest depository institution in America, takes on obligations to covered bond and secured debt holders. But unsecured creditors are out in the cold. Estimates vary but it is possible there is little to recover at the holding company level.

There are precedents for the FDIC’s approach to which debt investors should perhaps have paid heed. But, as the US financial system desperately needs more capital, it is an unfortunate time to upend assumptions of relative safety within capital structures.

Each ad hoc bailout, conservatorship and bankruptcy has changed the game. Raising funds, already tough for a swathe of weaker banks, becomes harder. Wachovia is next in the markets’ sights. If ever there was a time to produce that elusive, system-wide solution to the banking crisis, this is it.

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