Weaknesses in regional and small banks

Not so surprisingly, the attention and the billions in bailout money has been focused on the largest banks. Many have been talking about a lack of cash to support the smaller banks as well as some of the problem examples around the country. The report next week should provide some additional information into how weak or strong they are. CNNMoney:

Next Wednesday, Wall Street will get a clearer sense of what kind of shape the industry is in when the Federal Deposit Insurance Corp. publishes its first-quarter assessment of the industry. One closely-watched part of that report is the agency’s so-called “problem bank” list.

As of the end of 2008, that number stood at 252 institutions and it is expected to have climbed even higher during the first three months of 2009.

So far this year, the government has closed 34 banks, including the FDIC’s takeover and subsequent sale of Florida-based lender BankUnited (BKUNA) late Thursday to a group of private equity investors.

While only a fraction of the institutions on the problem bank list typically reach the point of failure, experts contend that regulators have been unable to shut down some “zombie” lenders, in part, because they are still scrambling to catch up with the variety of ills affecting the sector.


An American in Paris, France. BA in History & Political Science from Ohio State. Provided consulting services to US software startups, launching new business overseas that have both IPO’d and sold to well-known global software companies. Currently launching a new cloud-based startup. Full bio here.

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