Posts Tagged ‘u.s. bank closures’

U.S. Banking Crisis Worsens Amid More FDIC Bank Closures

June 27th, 2010 Comments off

In 2009 the United States experienced its worst year for bank closures since 1992. It now looks like 2010 will be an even more critical year for U.S. banks, with the FDIC on pace to exceed the 2009 record of 140 banks closed. With three more banks shut down by the FDIC after the Friday news cycle slowed for the weekend ( the customary bank shut down procedure for the FDIC), the total number of bank failures for 2010 already stands at 86.

Why are so many U.S. banks being closed after the U.S. Treasury Department’s vaunted bank stress test last spring declared America’s financial institutions to be healthy and well capitalized? Because, as I stated in my blog comment at the time, the so-called banking stress tests were a complete charade. In reality, much of America’s banking and financial system is virtually insolvent, and about to face an implosion in commercial real estate valuations polluting its balance sheets, along with the asset erosion that will be worsened by the pending double dip recession.

The global economic and financial crisis is far from over. The next phase in the deteriorating banking crisis in America, the UK and Eurozone points to a global recession morphing into a worldwide depression.

U.S. Bank Closures Now Stand at 106 For 2009

October 24th, 2009 Comments off

Like a thief in the night, the FDIC waits until Friday evenings to announce its latest list of bank failures. This propensity for stealth news on America’s crippled banking system is based on fear that if the information was released to the public in the middle of the week, with news rooms fully attentive, panic might result. This week’s quota of Friday bank follies courtesy of the FDIC is that seven more financial institutions have failed and had to be closed.

This streak of bank collapses posted on late Fridays is occurring with monotonous regularity. Yet, the bank stress tests stage-managed by U.S. Treasury Secretary Tim Geithner last spring were supposed to assure us that the banking system of the United States was solvent and well capitalized. This mythology is increasingly being ripped apart by this never-ending stream of nocturnal end-of-the-week press releases, courtesy of the FDIC.

Despite the record profits being posted by bailed out financial institutions, and the vast bonuses they are awarding to their top executives, I believe the growing list of bank closures, and the depletion of the  FDIC`s fund for paying depositors of these same banks, is a more reliable indicator on the state of banking in contemporary America.

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