Moving Through America's Twilight: Bank Failure Friday's And Bank Failure Insurance

Banks Have Us Flying Blind on Depth of Losses

Commentary by Jonathan Weil

Oct. 1 (Bloomberg) -- There was a stunning omission from the government’s latest list of “problem” banks, which ran to 416 lenders, a 15-year high, as of June 30. One outfit not on the list was Georgian Bank, the second-largest Atlanta-based bank, which supposedly had plenty of capital.

It failed last week.

Georgian’s clean-up will be unusually costly. The book value of Georgian’s assets was $2 billion as of July 24, about the same as the bank’s deposit liabilities, according to a Federal Deposit Insurance Corp. press release. The FDIC estimates the collapse will cost its insurance fund $892 million, or 45 percent of the bank’s assets. That percentage was almost double the average for this year’s 95 U.S. bank failures, and it was the highest among the 10 largest ones.

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IMF Eyes Bank Failure Insurance

Kevin Carmichael

Istanbul — Last updated on Friday, Oct. 02, 2009 10:43AM EDT

The International Monetary Fund appears poised to throw its weight behind the idea of requiring banks to pay for financial crisis insurance.

Speaking to reporters as economic officials from around the world gather for several days of meetings in Turkey's biggest city, Managing Director Dominique Strauss-Kahn said the IMF will spend the next several months reviewing proposals that would see banks set aside a portion of their profits to mitigate the cost of systemic failure.

Leaders from the Group of 20 commissioned the study after their summit in Pittsburgh last week. While still far from making any conclusions, Mr. Strauss-Kahn signalled that he is sympathetic to the idea, saying governments could force financial institutions to contribute to a fund that could act as insurance or help low-income countries that end up sideswiped by another global credit crisis.

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Bank Failures Scores 94. End Of Year May See 300+ More. FDIC May Tap Treasury.

U.S. Bank Failures Rise To 94

By John Letzing, MarketWatch

SAN FRANCISCO (MarketWatch) -- Two Irwin Union Bank subsidiaries in Kentucky and Indiana were closed by regulators Friday, bringing the total number of U.S. bank failures this year to 94 and punching an $850 million hole in the federal deposit insurance fund.

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First Bank Failures Announced In Indiana; Kentucky

The first bank failures in Indiana and Kentucky were announced, Friday. The Federal Deposit Insurance Corporation announced it was appointed receiver for Louisville, Kentucky-based Irwin Union Bank, F.S.B., and Columbus, Indiana-based Irwin Union Bank and Trust Co., by the Office of Thrift Supervision and the Indiana Department of Financial Instutions, respectively.

The two failed banks have a total of 27 bank branches and are subsidiaries of the Columbus, Indiana-based Irwin Financial Corporation. Irwin Union Bank and Trust Co. had a total of $2.7 billion in assets and deposits of $2.1 billion, and Irwin Union Bank had total assets of $493 million and deposits of $441 million as of Aug. 31, of this year.

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More Bank Failures Coming

September 17, 2009 — 6:27pm ET | By Jim Kim

Read more: http://www.fiercefinance.com/story/more-bank-failures-coming/2009-09-17#ixzz0RWO5obbt

So far this year, the Federal Deposit Insurance Corp. has shut down 92 banks. That compares with 25 banks last year. Business Week notes that this might be seen as surprisingly few closures. During the last banking crisis, 381 banks were seized in 1990, 268 in 1991, and 179 in 1992. But the crisis isn't over, and the pace of bank failures is picking up.

Three banks failed over the last few days, including Corus Bank of Illinois. Since July 1, the FDIC has closed down 47 banks. Meredith Whitney predicted not too long ago that 300 banks would fail this year. That's looking more and more prescient every week. Real estate, retail and especially commercial, remains the culprit. Construction loans are also creaking right now.

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FDIC chief considers tapping Treasury for funds

By DANIEL WAGNER (AP) – 10 hours ago

WASHINGTON — The chairman of the Federal Deposit Insurance Corp. says she is "considering all options, including borrowing from Treasury," to replenish the dwindling fund that insures bank deposits.

"I never say never," FDIC Chairman Sheila Bair told an audience at Georgetown University Friday.

Bair's remarks go beyond what she said just three weeks ago when asked about tapping the Treasury after the fund that insures regular deposit accounts up to $250,000 hit its lowest point since 1992, at the height of the savings-and-loan crisis. "Not at this point in time," she said on Aug. 27.

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WAMU Seized By The Feds!

We Are In The Midnight Hour In The Garden Of Good And Evil

There's only a few things that interest me...work...and those
trappings of aristocracy that I find worthwhile.
The very things they're forced to sell when the money runs out.
And it always runs out.
And then all they're left with...is their lovely manners. -
Kevin Spacey as Jim Williams from the movie
"Midnight In The Garden Of Good and Evil"

U.S. Government Seizes Washington Mutual

Friday, September 26, 2008

The U.S. government on Thursday made the largest bank seizure in American history, taking over Washington Mutual, the severely troubled savings and loan, and selling pieces of it to JPMorgan Chase in an emergency deal intended to avoid sticking the taxpayer with a bill for another bank, according to people briefed on the plan.

For weeks, the Federal Reserve and the Treasury Department had been nervous about the fate of WaMu, among the worst-hit by the housing crisis, and had pressed hard for the bank to sell itself. As panic gripped financial markets last week after the collapse of the investment bank Lehman Brothers, U.S. regulators stepped up their efforts, working behind the scenes, and at times going behind WaMu's back to work privately with potential bidders.