Washington Mutual settlement approved

The Federal Deposit Insurance Corporation (FDIC) has approved a global settlement of the bankruptcy case involving Washington Mutual, one of the largest US banks to fail as a result of the housing and credit crisis.

"The global settlement is subject to the approval of the United States Bankruptcy Court for the District of Delaware, where relevant documents were filed," the FDIC said in a statement.

"This agreement will result in substantial recoveries to the receiver and resolve potential claims that could have taken years and millions of dollars to litigate," said the FDIC's general counsel Michael Bradfield.

The FDIC is a participant in the global settlement because of claims and counterclaims involving the company resulting from its role as receiver. The agreement also settles claims between WMI and JPMorgan Chase, the acquirer of the failed Washington Mutual Bank.

Washington Mutual, or WaMu, one of the largest US savings and loans institutions, was closed by regulators who orchestrated a last-minute sale of its assets to JPMorgan Chase, on September 25.

Based in Seattle, Washington with $307 billion in assets, it was heavily exposed to bad mortgage investments at the heart of the financial crisis. Its failure came amid turmoil in financial markets.