The assets of California-based US mortgage bank IndyMac were seized by US federal regulators as the bank became the second largest financial institution in the country to fail in the country's history.
The Federal Deposit Insurance Corporation (FDIC) said late Friday evening in California that IndyMac's failure was the largest US bank crash since the fall of the Continental Illinois National Bank in 1984.
IndyMac's failure was due to its failure to raise capital to continue operations in the continuing credit crisis that has gripped the US. Depositors worried over the bank's financial health withdrew more than 1.3 billion dollars in the past 11 working days, at the same time as the company's shares were being driven into the ground, the dpa reported.
The FDIC insures deposits up to a total of 100,000 dollars, and is calculating a liability with the IndyMac seizure of between 4 and 8 billion dollars.
On Friday, major US stock indices dropped on continuing concern that mortgage giants Fannie Mae and Freddie Mac were threatened with possible collapse. US officials and politicians all sought to allay concerns Friday over the capital position of the two government- chartered companies.