JPMorgan Chase, a leading global financial services firm has informed that it has acquired all deposits, branches, assets and certain liabilities of Washington Mutual's banking operations from the Federal Deposit Insurance Corporation (FDIC) for around $1.9 billion.

However, the transaction excludes senior unsecured debt, subordinated debt and preferred stock of Washington Mutual's banks.

According to JPMorgan, the latest acquisition would create largest US depository institution with over $900 billion of customer deposits, along with a wide branch network - with locations reaching 42 per cent of US population.

Washington Mutual, the largest U. S. savings and loan association, has lost billions of dollars due to its exposure to subprime loans and the overall downturn in the housing market. It was founded as Washington National Building Loan and Investment Association on September 25, 1889.

Office of Thrift Supervision had shut down Washington Mutual due to insufficient liquidity, which makes it the largest failure of a US bank. It has about $307 billion of assets and $188 billion of deposits.

The largest previous U. S. banking failure was Continental Illinois National Bank & Trust, which had $40 billion of assets when it collapsed in 1984.

The latest deal is J. P. Morgan's second major acquisition this year. Earlier this fiscal, the company has bought Bear Stearns for more than $2 billion.