Skip to: Content
Skip to: Site Navigation
Skip to: Search
SUNDAY, NOVEMBER 22, 2009
| Subscribe to Newser's RSS feeds RSS | Follow Newser on Twitter Twitter


2

Troubled Securities Threaten to Drown Banks

Feds set to seize Texas' Guaranty

Share

(Newser) – Bad loans have been killing off banks at the fastest rate in 17 years—but now, securities purchased from other banks are a mounting threat, the Wall Street Journal reports. Thousands of banks nabbed securities dependent on mortgages and the financial industry. “Under most scenarios, they were good and prudent investments—as long as we didn't have a housing or banking crisis,” says one banking insider.

“There is no question that these securities will be ... for some of these banks the straw that breaks the camel's back,” notes another. For Texas bank Guaranty, that already appears to be the case: The government stands ready to seize the institution, plagued by $3.5 billion in mortgage-backed securities—two-thirds of which are in states reeling from foreclosure.

The Wall Street sign hangs in front of the American flag on the facade of the New York Stock Exchange Thursday, July 23, 2009 in New York.
The Wall Street sign hangs in front of the American flag on the facade of the New York Stock Exchange Thursday, July 23, 2009 in New York.   (AP Photo/Mary Altaffer)
« Prev« Prev | Next »Next » Slideshow

Some of these banks that made these investments didn't know what they were buying. Others just bought too much. - Wade Vandegrift, Red Pine Advisors LLC

« Prev« Prev | Next »Next » Slideshow
OFF THE GRID
11.20.09
The Health-Care Wars Have Just Begun
11.19.09
Sarah Palin Deserves Some More Attention
2 comments
VIEWING:
 
veloslug
Aug 21, 09 11:24 AM CDT
I smell some big bonuses coming for this. Reply
Vote up! Vote down!
+1
Newser001
Aug 21, 09 2:55 PM CDT
And they said it was all over; WallStreet Reply
Vote up! Vote down!
0
LEAVE A
COMMENT Comment Policy
Facebook ConnectPost this comment to Facebook?

After connecting you will have the option to post your comment on your Facebook profile.

 

Related Newser Stories

33 Stories

Fed Rolls Out Plan to Limit Bank Pay

It works in tandem
with pay czar's new compensation rules

Oct 22, 09 3:15 PM CDT
(Newser) - The Federal Reserve today officially announced a plan to regulate pay structures at banks, the same day the pay czar rolled out his plan to cap salaries at bailed-out firms. The administration’s double-whammy on compensation marks an unprecedented level of government involvement in the private sector, and the policies... More »

MORE ABOUT:
executive compensation • Federal Reserve • bank • compensation • financial institutions • risk factors • Kenneth Feinberg

 Wall Street 
 Forking Out 
 Record Pay 

Pay at top firms expected to hit $140B as markets rebound

Oct 14, 09 5:36 AM CDT
(Newser) - Major financial firms have bounced back from the brink of meltdown and are on course to hand out their biggest-ever pay packages this year. The total payout at the big banks and securities firms will hit $140 billion this year, according to Wall Street Journal projections based on revenue figures... More »

MORE ABOUT:
Wall Street • executive compensation • Goldman Sachs • bank • financial institutions • executive bonuses

FDIC May Borrow Billions From Banks

Tapped-out deposit insurance fund
mulls reverse bailout

Sep 22, 09 6:37 AM CDT
(Newser) - After a year of government bailing out the banks, now the banks may bail out the government. Regulators are considering a plan for the FDIC, which protects bank depositors, to borrow billions from healthy banks, enabling the fund to refresh its accounts after a wave of bank failures. Banks and... More »

MORE ABOUT:
bank • FDIC • bailout • bank failure • deposit insurance • Sheila Bair • Timothy Geithner

33 Stories


Business 
TwitterFollow @NewserBusiness on Twitter

 
bank • securities • mortgage backed securities • financial institutions • housing crisis • bank failure

from our news partners