"Bank failures strain FDIC fund; premiums might rise; 8 institutions have failed this year; 90 more are 'problems'" by Bloomberg News | August 12, 2008
WASHINGTON - The failure of IndyMac Bancorp Inc. and seven other banks this year may erase as much as 17 percent of a government insurance fund and raise premiums for all banks.
The closing of IndyMac in July, the third-biggest US bank failure, may cost the Federal Deposit Insurance Corp.'s fund $4 billion to $8 billion, in addition to an estimated $1.16 billion for seven closures through Aug. 1. Premiums for insuring deposits will likely rise, FDIC chairwoman Sheila Bair said last month. A decision is due by the fourth quarter.
"It's going to be a bloody, expensive mess for the banking industry," said Bert Ely, president of Ely & Co. Inc., a bank consulting firm based in Alexandria, Va. "Healthy banks are paying for the mistakes made by failed banks."
Translation: The ENTIRE SYSTEM is ILL!!!!!
The pace of bank closings is accelerating as financial firms have reported almost $495 billion in write-downs and credit losses since 2007. The potential $9.16 billion in withdrawals would be the highest since the insurance account was created in 1933.
That is NOT a GOOD SIGN, Americans!
Bank of America is the biggest US bank by deposits, with almost $800 billion as of March 31, followed by JPMorgan Chase & Co., Wachovia Corp., Wells Fargo & Co., and Citigroup Inc., the FDIC said.
The fund will collect about $5 billion this year as insured banks pay an estimated $2.5 billion and the fund balance generates about $2.5 billion in interest, said James Chessen, chief economist at the American Bankers Association, a Washington-based industry group.
WTF? WHERE is ALL THIS $$$$ going?
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I'll tell you where: the banks are KEEPING IT!
WASHINGTON - More banks are tightening lending standards on home mortgages and other consumer and business loans as a deepening credit crisis exerts a heavier toll on the economy.
The Federal Reserve said the percentage of banks reporting tighter lending standards rose across various loan types in its July survey. In April, the central bank had found that the percentage of banks reporting tighter lending standards was already near historic highs.
Seriously, where did all that liquidity money go?
The Fed survey found that only seven of the 50 banks said they were still participating in subprime mortgages, loans made to borrowers with weak credit histories. Of those seven, six said they had tightened lending standards on subprime loans with only one saying it had left standards basically unchanged.
The survey found that most banks were reporting tighter lending standards across a broad swath of consumer and business loans over the past three months.
Harm Bandholz, an economist with UniCredit Markets, said the tightening in bank standards for credit cards and other consumer loans would be "another nail in the coffin of the US consumer, who is already suffering from the weak labor market, high inflation and falling house prices."
That thing is at the bottom of the river already, too!!!!
David Wyss, chief economist for Standard & Poor's in New York, said the tighter lending standards reflect the huge loan losses that banks have already suffered. Those losses have depleted the capital they need as reserves against future losses and made it more difficult for the banks to sell their mortgages and other loans as asset-backed securities, a process that provides them with money to make new loans.
The current credit crisis hit a year ago with rising defaults in the market for subprime mortgage loans. The credit problems have since spread to other types of mortgages and other kinds of loans. The country's major financial institutions have reported billions of dollars in losses, and financial markets remain unsettled with investors concerned about potential losses yet to be disclosed.
You mean, there is MORE OUT THERE?
We are FUCKED, America!!!!
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