US bank Washington Mutual warned that the subprime mortgage sector crisis is threatening its operations, in a document filed late Thursday with the Securities and Exchange Commission.
Due to the conditions roiling the subprime sector, "the companys liquidity may be affected by an inability to access the capital markets or by unforeseen demands on cash.
"This situation may arise due to circumstances beyond the companys control, such as a general market disruption," the bank said.
Washington Mutual said that during the first half of the year and continuing into the third quarter of 2007, there has been "significant volatility in the subprime secondary mortgage market which has spread into markets for all other nonconforming residential mortgages."
"While these market conditions persist, the companys ability to raise liquidity through the sale of mortgage loans in the secondary market will be adversely affected," it said.
Subprime mortgage loans are loans that are granted to Americans with poor credit histories. Rising defaults on subprime loans have sparked turmoil in US financial markets.
Shares in Washington Mutual plunged 8.27 percent to 33.72 dollars in pre-market futures trading early Friday.
