Another Friday, another bank failure
August 29, 2008 – 9:03 pmIntegrity Bank in Georgia was shut down by the FDIC today. Bloomberg has the story.
Integrity Bank, with $1.1 billion in assets and $974 million in deposits, was shuttered by the Georgia Department of Banking and Finance and the Federal Deposit Insurance Corp. Regions Financial Corp., Alabama’s biggest bank, will assume all deposits from Integrity, which was run by Integrity Bancshares Inc. The failed bank’s five offices will open on Sept. 2 as branches of Regions, the FDIC said.
“Depositors will continue to be insured with Regions Bank so there is no need for customers to change their banking relationship to retain their deposit insurance,” the FDIC said.
Banks are being closed at the fastest pace in 14 years as financial companies report more than $505 billion in writedowns and credit losses since 2007. California lender IndyMac Bancorp Inc., which had $32 billion in assets, was closed July 11 in the third-largest bank seizure, contributing to a 14 percent drop in the U.S. deposit insurance fund that had $45.2 billion at the end of the in the second quarter.
Scary to think that bigger banks like Wachovia and WaMu are in such deep trouble that they’re offering way above market rates on CDs. (hat tip CR) It’s a replay of the S&L crisis. Banks desperate for capital pay up for the one funding source that comes with a government guarantee: retail deposits.
Scary to think that WaMu has $140 billion of insured deposits, three times what’s left in FDIC’s Deposit Insurance Fund. IndyMac had only $18 billion of insured deposits, and will cost the DIF almost $9 billion. If WaMu goes bust, a much smaller loss rate would be enough to wipe out the DIF.
Get ready for another bailout.
Posted in bailout, banking, credit crunch |
5 Responses to “Another Friday, another bank failure”
Does this indicate that Regions Financial is in good health, then? I had been hearing rumors to the contrary.
By TC on Aug 30, 2008
What website gives the CAMELS rating for banks?
By DM on Aug 30, 2008
CAMEL ratings are confidential, they are not published and a bank is prohibited from sharing their ratings with the public.
By PG on Sep 2, 2008
Paulson’s Goldman Sachs bonuses…
Posted by Helena Cobban
September 22, 2008 2:00 PM EST | Link
Filed in Economic crisis
…were earned for what? John Gapper of the FT has done some digging around, and found that in the period before Paulson quit being GS’s CEO to become US Treasury Secretary in May 2006, he was busy slicin’, dicin’, and repackagin’ those old mortgage-backed securities along with the rest of them.
Gapper found that GS’s regulatory filing for the first quarter of 2006 reported that,
During the three months ended February 2006 and February 2005, the firm securitised $19.25bn and $15.24bn, respectively, of financial assets, including $18.15bn and $14.43bn, respectively, of residential mortgage loans and securities.
And GS had also by that time apparently acquired additional investments in mortgage-backed and other allegedly asset-backed (in-)securities and CDOs, including $22 billion of CDOs, $2.9bn of “asset repackagings and credit-linked notes” and $6.5bn of “mortgage-backed and other asset-backed” securities…
Well, I guess that for “Hank” Paulson, as everyone seems very chummily to refer to him, where you stand really does depend on where you sit.
Because yesterday, he was all over the airwaves denouncing as “irresponsible” the way in which the big banks and financial houses had been slicing’ and dicin’ all those worthless pieces of mortgage-paper junk.
Gapper also recalls that GS gave Paulson a performance bonus of $18.7 million for the first half of 2006.
Intriguing to see even such a dedicated free-marketer as John Gapper wondering in public whether,
as a public gesture, Mr Paulson might consider handing that bonus over to the Treasury’s fund and lowering the US taxpayer’s bill by $18.7m?
The highest paid official in the US government is the President, at $400 million thousand (nice digs, Air Force One, helicopters, etc not included.)
I see John McCain today said during a campaign stop that “The senior executives of any firm that is bailed out by Treasury should not be making more than the highest paid government official.”
Not a bad principle, at all.
DO WE WANT ANOTHER MAJOR DISASTER?
I guess not as this time it is our money - honest taxpayer money and we work hard for it!
By sergi on Sep 26, 2008
A forewarned soldier never looses a battle!!!!
Regions Bank, Alabama is next to fall, the stock fell dramatically today 10/8/08; a multi-million dollar lawsuit was filed against the corporation; consumers are also noticing that their checking accounts at Regions are being fraudulently stolen..the accounting in checking accounts (additions, etc.) are wrong and fraud is being committed by the millions..go over your monthly statements and verify the accounting..FRAUD !!!!!
By Louis Peterson on Oct 8, 2008