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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The #1 Reason To Say No To Global Governance: Global Central Bank Corruption, Fraud And Abuse With No Accountability

As Catherine Austin Fitts Has Said, Echoed By Michael Ruppert, Aaron Russo, Ron Paul, Myself and Others, Until America Changes The Way Money Works, You CHANGE Nothing! Abolishing The Federal Reserve Is How You Cut The Head Off This Beast! There's Still Time. Start Asking Them The Right Questions! - Johnny

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Global Financial Crisis: Does The World Need A New Banking 'Policeman'?

With war raging across the globe in July 1944, ministers from all 44 Allied nations met at the imposing Mount Washington Hotel in Bretton Woods, New Hampshire, to thrash out a set of rules that would govern world finance once Hitler was defeated.

By Gordon Rayner, Chief Reporter
Last Updated: 1:36AM BST 08 Oct 2008

Knowing that greater international trade would help to prevent future wars, and determined to avoid another Great Depression, the delegates signed the Bretton Woods Agreements, creating the International Monetary Fund and the World Bank. It was a big vision, driven by grand historical figures: Winston Churchill, Franklin D Roosevelt and the British economist John Maynard Keynes.

But a system that was designed 64 years ago has, not surprisingly, proved ill equipped to deal with the fiendishly complex practices of 21st-century banking that led to the current worldwide crisis.

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