IndyMac Collapses amidst Financial Crisis

IndyMac Bank becomes the second largest financial institution to fall in U.S history as it succumbed to the pressures of the credit crunch. Risky lending practices also contributed to the bank's demise.

Bank regulators on Friday seized the bank's assets amid fears IndyMac might be unable to meet continued withdrawals by investors with countless depositors having already withdrawn their money from the stricken bank.

The Office of Thrift Supervision (OTS), the bank's primary regulator, said it transferred IndyMac's operations to the Federal Deposit Insurance Corporation (FDIC) amid a potential shortage of liquidity.

FDIC spokesman, David Barr speaking to the press on Friday said a buyer would be sought out for the beleaguered mortgage lender. "The FDIC over the next 90 days or so will begin to market this bank (IndyMac) to try to get it back into private hands. But until then for customers, if you had less than $100,000 there's no change in business for you. It should be business as usual."

IndyMac collapsed as shares in two of America's home loan institutions - Freddie Mac and Fannie Mae - saw their share prices slashed in half.