New York - Federal regulators late Thursday shut down Washington Mutual Inc (WaMu), the largest US saving and loan, in what is is the largest-ever US bank failure.

WaMu's deposit accounts were immediately purchased by banking giant JP Morgan Chase & Co for 1.9 billion dollars, guaranteeing that no depositors would lose money.

WaMu, based in Seattle, Washington, collapsed when its credit rating was downgraded to junk status late Wednesday, bringing action by the Federal Deposit Insurance Corporation (FDIC), a government agency that insures bank accounts up to 100,000 dollars.

Since last week, WaMu customers had pulled more than 16 billion dollars from their accounts, according to the Office of Thrift Supervision, which declared the bank to be "unsound."

JP Morgan is only buying WaMu's consumer deposits, leaving the thrift's liabilities to the FDIC to resolve. WaMu had lost a reported 19 billion dollars on bad mortgage loans, amid the ongoing Wall Street crisis stemming from mortgage securities. dpa