bank failure

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How Iceland Got Its Groove Back

Letting its banks perish worked out for island nation

(Newser) - Don't look now, but Iceland's economy is growing. Tourism is up, the standard of living remains high, and unemployment is down to 7%. "For a country whose entire financial system collapsed, Iceland is doing remarkably well," the IMF's mission chief there tells the Washington Post... More »

Bank Failures Far From Over

Failures down in 2011, but weak banks are taking longer to recover or die

(Newser) - Bank failures were down significantly in 2011, but that doesn't mean banks are getting healthier—it just means sick ones are taking longer to die, the Wall Street Journal finds. Some 92 banks failed last year, down from 157 in 2010. But many of 2011's casualties were in... More »

FDIC Launches 50 Criminal Inquiries of Failed Banks

But it won't name names yet

(Newser) - The FDIC has launched criminal investigations targeting around 50 executives, directors, and employees from banks that failed during the financial crisis. Regulators won’t say which banks or executives are under investigation yet, but did tell the Wall Street Journal that banks of all sizes from across the country are... More »

FDIC Closes Bank No. 28: NYC's Park Avenue Bank

Latest to fail had about $1B on the books

(Newser) - Federal regulators shut down Park Avenue Bank in New York today, marking the 28th failure this year of a federally insured bank. The Federal Deposit Insurance Corp. was appointed receiver of Park Avenue Bank. It had $520.1 million in assets and $494.5 million in deposits as of Dec.... More »

FDIC Seizes 4 More Banks

Tally hits 26 this year; pace of closures expected to increase in coming months

(Newser) - Regulators yesterday shuttered banks in Florida, Illinois, Maryland, and Utah, boosting to 26 the number of US bank failures so far this year following the 140 brought down in 2009 by mounting loan defaults. The pace of bank seizures this year is likely to accelerate , FDIC officials have said, as... More »

Lending Falls at Fastest Rate Since 1942

Boatload of bank failures likely in 2010

(Newser) - Banks tightened credit last year at what the Wall Street Journal calls an “epic pace,” recording their biggest full-year decline in loans outstanding in 67 years. The figure comes from a new FDIC report that paints the picture of a banking industry that, apart from a few top-tier... More »

Geithner: Goldman Woulda Failed Sans Bailout

Execs dreaming if they think they wouldn't have failed

(Newser) - Goldman Sachs fatcats were musing this week about how they might have been fine without a federal bailout, but Tim Geithner is having none of it: “None of them would have survived,” he tells Bloomberg , without federal intervention. “The entire US financial system and all the major... More »

Danger Signs Ignored at Failed Banks

Regulators knew loans were toxic but didn't act

(Newser) - "Post-mortems" on banks that failed during the financial crisis are exposing serious misjudgment by state and federal regulators. Inspectors-general are finding at bank after bank that regulators were aware that risky and potentially toxic loans were being made while the economy was booming, but failed to take action, the... More »

Sorry, FDIC Can't Guarantee Interest on That CD

When selling failed banks, Feds allow buyers to slash expected payout

(Newser) - There’s a little-publicized part of your bank deposit the FDIC doesn’t insure, and it’s driving scrupulous savers up the wall. The logic is simple enough: When the FDIC takes over a failed bank and resells its assets, it allows buyers to alter interest rates, particularly on CDs.... More »

As Failures Mount, FDIC Asks Banks to Prepay

Regulator wants cash upfront through 2013 to avoid emergency credit line

(Newser) - The FDIC is set to ask banks to prepay three years of fees to replenish its coffers after a wave of bank failures, estimated to cost as much as $100 billion. Banks would be asked to prepay $45 billion of their quarterly assessments, but they wouldn't have to report the... More »

FDIC May Borrow Billions From Banks

Tapped-out deposit insurance fund mulls reverse bailout

(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 »

Troubled Securities Threaten to Drown Banks

Feds set to seize Texas' Guaranty

(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... More »

Southern Lender Becomes Year's Biggest Bank Failure

(Newser) - Alabama's Colonial Bank has collapsed in the sixth-biggest bank failure in American history, the Wall Street Journal reports. The lender, which had assets of $25 billion and 346 branches in five southern states, was an aggressive mortgage lender in overheated markets like Florida, and its failure will cost the FDIC ... More »

Its Economy in Ruins, Iceland Votes to Join the EU

(Newser) - Iceland held fast to its independence as it rocketed to become one of the world's richest nations. But after a spectacular bust that decimated its currency and felled its government, the island nation has voted to join the EU. The accession plans are a victory for the country's new PM,... More »

Feds Seize Florida Bank in $4.9B Bust

BankUnited sold off to private equity consortium

(Newser) - Florida's BankUnited went bust yesterday as the FDIC seized the critically undercapitalized bank and sold it off to a private-equity team including Blackstone, reports the Wall Street Journal. BankUnited's troubles stemmed from overeager moves in the housing market. It specialized in loans for foreigners wanting to buy Florida property. After... More »

Time to Stress Out About Stress Tests

Washington is leading us to a second crisis: Krugman

(Newser) - Sure, yesterday's release of the stress tests' results felt pretty anti-climatic. But while bankers might be reassured, Americans have no reason to be, writes Paul Krugman. For the New York Times columnist, the less-than-rigorous stress tests are part and parcel of an Obama administration strategy to "muddle through the... More »

Stress Tests Expected to Show Confidence in Banks

Administration ready to say bailout worked

(Newser) - The top US banks may not be as deep in the mud as analysts fear, government "stress tests" out Thursday are expected to show. Officials seem ready to argue that the nation's financial system is recovering and won't require more bailout funds from Congress. "None of these banks... More »

Biggest US 'Bankers' Bank' Fails

(Newser) - The FDIC has shut down a Georgia-based bank that was the largest in the country to accept deposits exclusively from other banks, the Wall Street Journal reports. Some argued that Silverton Bank—known as the Bankers' Bank until last year—was “too big to fail.” The FDIC has... More »

Fed Describes 'Stress Tests'

(Newser) - At the behest of the Federal Reserve, the 19 biggest US banks are projecting their losses on 12 categories of financial product such as loans and mortgage securities, the New York Times reports. The Fed, which asked the institutions to project a hypothetical scenario of a “stressed economic environment,... More »

Banks Fall; Dow Slides 122

But indices lock in first two-week winning streak in nearly a year

(Newser) - Stocks fell today but managed to lock in the first two consecutive weeks of gains since May 2008, the Wall Street Journal reports. Comments from FDIC chair Sheila Bair that she expects bank failures to drain her agency sank financials, with the broader market following suit. The Dow dropped 122.... More »

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