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U.S. bank failures total 108 after 5 shut on Friday
WASHINGTON |
WASHINGTON (Reuters) - U.S. bank failures reached 108 so far in 2010 on Friday as regulators seized five small banks in the Pacific Northwest and the Southeast, none publicly traded.
Bank failures are expected to peak this quarter, with the industry slowly recovering from large portfolios of bad loans, many tied to commercial real estate.
The banks seized on Friday were LibertyBank of Eugene, Oregon; The Cowlitz Bank of Longview, Washington; Coastal Community Bank of Panama City Beach, Florida; Northwest Bank & Trust of Acworth, Georgia; and Bayside Savings Bank of Port Saint Joe, Florida, according to the Federal Deposit Insurance Corp.
The five banks would cost the agency's deposit insurance fund about $335 million, the FDIC said.
The largest of the five banks was LibertyBank with 15 branches and about $768.2 million in total assets and $718.5 million in total deposits. The smallest was Bayside Savings Bank with just two branches and $66.1 million in total assets and $52.4 million in deposits.
Although failures are still occurring at a rapid pace, it is mostly smaller institutions that have been collapsing recently.
The biggest bank failure of the crisis was Washington Mutual, which had $307 billion in assets when it was seized in September 2008.
The annual level of bank failures has not reached the levels during the savings and loan crisis, when 534 institutions were seized in 1989 alone.
In the current crisis, the problems dogging the banking industry have migrated from home mortgages to commercial real estate, especially for community banks that tend to have higher concentrations of commercial real estate loans.
Regulators have not publicly revealed estimates of how many bank failures are still to come, but the FDIC has said it expects the cost to hit $60 billion from 2010 through 2014.
(Additional reporting by Karey Wutkowski; Editing by Jonathan Thatcher)
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After the Great Depression, Congress improved regulation and it worked well for a few decades. Things change over time, so both the House and the Senate have Banking Committees to keep banking practices within safe limits as innovation and/or circumstances bring new risks to the system.
Instead of looking out for the health of our financial system, those committees began looking our for the interests of the banking community.
Christopher Dodd has been trying to find a white hat he can wear and Barney Frank has tried on a halo or two.
The truth is that they and the members of their committees have not worked in the citizens’ interest for at least 20 years, spanning both Republican and Democratic leadership.
Curiously, no one from Congress has gone to jail over what happened to our nation’s financial system. There weren’t even any censures or official reprimands.
The financial reforms that were so strongly opposed by those who stand to profit from the status quo are just a minor setback.
Those profiteers can still work behind the scenes to shape the system they way they want it to be. They will find plenty of people in Congress ready to work closely with them.
Congress seems to have legislative immunity to the kinds of punishment they so richly deserve.
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