Saturday, June 20, 2009
Failure Friday Returns
40 banks have closed so far this year, three of which were closed yesterday. All three banks were on the bad banks list.
I am puzzled by the seemingly haphazard process that the FDIC is following when deciding to shutter a bank. Size is obviously a concern (the larger the bank, the longer it tends to linger), but beyond that, there seems to be no discernible pattern.
This Corus Bank saga is crazy. The bank is beyond repair and management has been selling shares by the millions in the last few weeks. The longer this bank is allowed to exist, the greater the risk to the FDIC. Since the FDIC is running out of money, that means more risk for you & me.