Fannie Mae, Battling Losses, to End Alt-A Mortgages (Update4)
By Jody Shenn
Aug. 8 (Bloomberg)
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ac.pGKwsRx5k
Fannie Mae, the largest U.S. mortgage finance company, will stop buying and guaranteeing Alt-A mortgages because of surging losses from home loans to borrowers without proof of their finances.
Fannie won't accept new Alt-A loans after Dec. 31, according to a statement today. The mortgages, which make up about 11 percent of the $3 trillion financed by the Washington-based company, accounted for almost half of second-quarter credit losses, Chief Financial Officer Stephen Swad said today on a conference call.
The debt, generally considered between prime and subprime in terms of expected defaults, has "driven our credit expenses," Chief Executive Officer Daniel Mudd said on the call. ``Alt-A foreclosures have doubled in southern California.''
Saturday, August 9, 2008
Friday, August 8, 2008
Failed Bank List
Failed Bank List
http://www.fdic.gov/bank/individual/failed/banklist.html
The FDIC is often appointed as receiver for failed banks. This page contains useful information for the customers and vendors of these banks. This includes information on the acquiring bank (if applicable), how your accounts and loans are affected, and how vendors can file claims against the receivership.
This list includes banks which have failed since October 1, 2000.
First Priority Bank, Bradenton, FL (August 1, 2008)
First Heritage Bank, NA, Newport Beach, CA(July 25, 2008)
First National Bank of Nevada, Reno, NV (July 25, 2008)
IndyMac Bank, Pasadena, CA (July 11, 2008)
First Integrity Bank, NA, Staples, MN(May 30, 2008)
ANB Financial, NA, Bentonville, AR (May 9, 2008)
Hume Bank, Hume, MO (March 7, 2008)
Douglass National Bank, Kansas City, MO (January 25, 2008)
Miami Valley Bank, Lakeview, OH (October 4, 2007)
NetBank, Alpharetta, GA (September 28, 2007)
Metropolitan Savings Bank, Pittsburgh, PA (February 2, 2007)
Bank of Ephraim, Ephraim, UT (June 25, 2004)
Reliance Bank, White Plains, NY (March 19, 2004)
Guaranty National Bank of Tallahassee, Tallahassee, FL (March 12, 2004)
Dollar Savings Bank, Newark, NJ (February 14, 2004)
Pulaski Savings Bank, Philadelphia, PA (November 14, 2003)
The First National Bank of Blanchardville, Blanchardville, WI (May 9, 2003)
Southern Pacific Bank, Torrance, CA (February 7, 2003)
The Farmers Bank of Cheneyville, Cheneyville, LA (December 17, 2002)
The Bank of Alamo, Alamo, TN (November 8, 2002)
AmTrade International Bank of Georgia, Atlanta, GA (September 30, 2002)
Universal Federal Savings Bank, Chicago, IL (June 27, 2002)
Connecticut Bank of Commerce, Stamford, CT (June 26, 2002)
New Century Bank, Shelby Township, MI (March 28, 2002)
Net 1st National Bank, Boca Raton, FL (March 1, 2002)
NextBank, N.A., Phoenix, AZ (February 7, 2002)
Oakwood Deposit Bank Company, Oakwood, OH (February 1, 2002)
Bank of Sierra Blanca, Sierra Blanca, TX (January 18, 2002)
Hamilton Bank, N.A., Miami, FL (January 11, 2002)
Sinclair National Bank, Gravette, AR (September 7, 2001)
Superior Bank, FSB, Hinsdale, IL (July 27, 2001)
The Malta National Bank, Malta, OH (May 3, 2001)
First Alliance Bank & Trust Company, Manchester, NH (February 2, 2001)
National State Bank of Metropolis, Metropolis, IL (December 14, 2000)
Bank of Honolulu, Honolulu, HI October 13, 2000 (March 17, 2005)
http://www.fdic.gov/bank/individual/failed/banklist.html
The FDIC is often appointed as receiver for failed banks. This page contains useful information for the customers and vendors of these banks. This includes information on the acquiring bank (if applicable), how your accounts and loans are affected, and how vendors can file claims against the receivership.
This list includes banks which have failed since October 1, 2000.
First Priority Bank, Bradenton, FL (August 1, 2008)
First Heritage Bank, NA, Newport Beach, CA(July 25, 2008)
First National Bank of Nevada, Reno, NV (July 25, 2008)
IndyMac Bank, Pasadena, CA (July 11, 2008)
First Integrity Bank, NA, Staples, MN(May 30, 2008)
ANB Financial, NA, Bentonville, AR (May 9, 2008)
Hume Bank, Hume, MO (March 7, 2008)
Douglass National Bank, Kansas City, MO (January 25, 2008)
Miami Valley Bank, Lakeview, OH (October 4, 2007)
NetBank, Alpharetta, GA (September 28, 2007)
Metropolitan Savings Bank, Pittsburgh, PA (February 2, 2007)
Bank of Ephraim, Ephraim, UT (June 25, 2004)
Reliance Bank, White Plains, NY (March 19, 2004)
Guaranty National Bank of Tallahassee, Tallahassee, FL (March 12, 2004)
Dollar Savings Bank, Newark, NJ (February 14, 2004)
Pulaski Savings Bank, Philadelphia, PA (November 14, 2003)
The First National Bank of Blanchardville, Blanchardville, WI (May 9, 2003)
Southern Pacific Bank, Torrance, CA (February 7, 2003)
The Farmers Bank of Cheneyville, Cheneyville, LA (December 17, 2002)
The Bank of Alamo, Alamo, TN (November 8, 2002)
AmTrade International Bank of Georgia, Atlanta, GA (September 30, 2002)
Universal Federal Savings Bank, Chicago, IL (June 27, 2002)
Connecticut Bank of Commerce, Stamford, CT (June 26, 2002)
New Century Bank, Shelby Township, MI (March 28, 2002)
Net 1st National Bank, Boca Raton, FL (March 1, 2002)
NextBank, N.A., Phoenix, AZ (February 7, 2002)
Oakwood Deposit Bank Company, Oakwood, OH (February 1, 2002)
Bank of Sierra Blanca, Sierra Blanca, TX (January 18, 2002)
Hamilton Bank, N.A., Miami, FL (January 11, 2002)
Sinclair National Bank, Gravette, AR (September 7, 2001)
Superior Bank, FSB, Hinsdale, IL (July 27, 2001)
The Malta National Bank, Malta, OH (May 3, 2001)
First Alliance Bank & Trust Company, Manchester, NH (February 2, 2001)
National State Bank of Metropolis, Metropolis, IL (December 14, 2000)
Bank of Honolulu, Honolulu, HI October 13, 2000 (March 17, 2005)
Thursday, August 7, 2008
You Know The Banking System Is Unsound When....
You Know The Banking System Is Unsound When....
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Wednesday, July 23, 2008
http://globaleconomicanalysis.blogspot.com/2008/07/you-know-banking-system-is-unsound-when.html
25 Rock Solid Reasons To Believe The Banking System Is Unsound:
1. Paulson appears on Face The Nation and says "Our banking system is a safe and a sound one." If the banking system was safe and sound, everyone would know it (or at least think it). There would be no need to say it.
...
25. Of the $6.84 Trillion in bank deposits, the total cash on hand at banks is a mere $273.7 Billion. Where is the rest of the loot? The answer is in off balance sheet SIVs, imploding commercial real estate deals, Alt-A liar loans, Fannie Mae and Freddie Mac bonds, toggle bonds where debt is amazingly paid back with more debt, and all sorts of other silly (and arguably fraudulent) financial wizardry schemes that have bank and brokerage firms leveraged at 30-1 or more. Those loans cannot be paid back.
What cannot be paid back will be defaulted on. If you did not know it before, you do now. The entire US banking system is insolvent.
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Wednesday, July 23, 2008
http://globaleconomicanalysis.blogspot.com/2008/07/you-know-banking-system-is-unsound-when.html
25 Rock Solid Reasons To Believe The Banking System Is Unsound:
1. Paulson appears on Face The Nation and says "Our banking system is a safe and a sound one." If the banking system was safe and sound, everyone would know it (or at least think it). There would be no need to say it.
...
25. Of the $6.84 Trillion in bank deposits, the total cash on hand at banks is a mere $273.7 Billion. Where is the rest of the loot? The answer is in off balance sheet SIVs, imploding commercial real estate deals, Alt-A liar loans, Fannie Mae and Freddie Mac bonds, toggle bonds where debt is amazingly paid back with more debt, and all sorts of other silly (and arguably fraudulent) financial wizardry schemes that have bank and brokerage firms leveraged at 30-1 or more. Those loans cannot be paid back.
What cannot be paid back will be defaulted on. If you did not know it before, you do now. The entire US banking system is insolvent.
29 States Faced Budget Shortfall In 2009
29 States Faced Total Budget Shortfall Of At Least $48 Billion In 2009
By Elizabeth C. McNichol and Iris Lav
Updated August 5, 2008
http://www.cbpp.org/1-15-08sfp.htm
The bursting of the housing bubble has reduced state sales tax revenue collections from sales of furniture, appliances, construction materials, and the like. Weakening consumption of other products has also cut into sales tax revenues. Property tax revenues have also been affected, and local governments will be looking to states to help address the squeeze on local and education budgets. And if the employment situation continues to deteriorate, income tax revenues will weaken and there will be further downward pressure on sales tax revenues as consumers become reluctant or unable to spend.
The vast majority of states cannot run a deficit or borrow to cover their operating expenditures. As a result, states have three primary actions they can take during a fiscal crisis: they can draw down available reserves, they can cut expenditures, or they can raise taxes. States already have begun drawing down reserves; the remaining reserves are not sufficient to allow states to weather a significant downturn or recession. The other alternatives — spending cuts and tax increases — can further slow a state’s economy during a downturn and contribute to the further slowing of the national economy, as well.
By Elizabeth C. McNichol and Iris Lav
Updated August 5, 2008
http://www.cbpp.org/1-15-08sfp.htm
The bursting of the housing bubble has reduced state sales tax revenue collections from sales of furniture, appliances, construction materials, and the like. Weakening consumption of other products has also cut into sales tax revenues. Property tax revenues have also been affected, and local governments will be looking to states to help address the squeeze on local and education budgets. And if the employment situation continues to deteriorate, income tax revenues will weaken and there will be further downward pressure on sales tax revenues as consumers become reluctant or unable to spend.
The vast majority of states cannot run a deficit or borrow to cover their operating expenditures. As a result, states have three primary actions they can take during a fiscal crisis: they can draw down available reserves, they can cut expenditures, or they can raise taxes. States already have begun drawing down reserves; the remaining reserves are not sufficient to allow states to weather a significant downturn or recession. The other alternatives — spending cuts and tax increases — can further slow a state’s economy during a downturn and contribute to the further slowing of the national economy, as well.
Hank Paulson's Fannie Gamble
Hank Paulson's Fannie Gamble
By LAWRENCE B. LINDSEY
August 1, 2008; Page A13
http://online.wsj.com/article/SB121754567926302543.html?mod=Letters
Conservatives can rightly argue that had Congressional Democrats not blocked the various initiatives of the Bush administration to reform Fannie Mae and Freddie Mac for the past five years, we would not be sitting at the precipice like we are today. But that does not change the need for a government injection of funds to fill the financial hole in those two enterprises. The institutional arrangements in the American mortgage market cannot be changed overnight, and the risks of a breakdown in that market at some point over the next 18 months are still quite real.
The trouble is, the legislation that just passed Congress indicates that Washington has learned nothing from our recent troubles. And, as this bailout bill is likely to be followed by at least one additional bill next year, the evident inability or unwillingness of Congress to move up the learning curve and abandon its past practices will make the ultimate cost to the taxpayer far higher than it might have been.
By LAWRENCE B. LINDSEY
August 1, 2008; Page A13
http://online.wsj.com/article/SB121754567926302543.html?mod=Letters
Conservatives can rightly argue that had Congressional Democrats not blocked the various initiatives of the Bush administration to reform Fannie Mae and Freddie Mac for the past five years, we would not be sitting at the precipice like we are today. But that does not change the need for a government injection of funds to fill the financial hole in those two enterprises. The institutional arrangements in the American mortgage market cannot be changed overnight, and the risks of a breakdown in that market at some point over the next 18 months are still quite real.
The trouble is, the legislation that just passed Congress indicates that Washington has learned nothing from our recent troubles. And, as this bailout bill is likely to be followed by at least one additional bill next year, the evident inability or unwillingness of Congress to move up the learning curve and abandon its past practices will make the ultimate cost to the taxpayer far higher than it might have been.
Who pays when lenders fail?
Who pays when lenders fail?
Don't foreclose - keep borrowers in their homes
Ted W. Lieu
Thursday, August 7, 2008
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/08/06/ED361269K6.DTL
If there is any silver lining to the second largest thrift failure in U.S. history, it is this: the IndyMac bank collapse has ironically resulted in the nation's first foreclosure moratorium. The Federal Deposit Insurance Corporation, after taking over IndyMac, declared it would halt all foreclosures on the $15 billon worth of IndyMac mortgages and modify the loans to keep borrowers in their homes. In one fell swoop, the FDIC did what no presidential contender, governor, or legislator has been able to do: force a moratorium on a significant number of foreclosures.
IndyMac's dramatic collapse provides two important lessons learned. First, the bank's failure reminds us that preventing foreclosures helps everyone, including those who did not participate during the mortgage boom. Representing an Assembly district with several IndyMac branches, I know that customers who lost money on their uninsured deposits did so not because of their own doing, but because of a nationwide foreclosure crisis spiraling out of control.
Don't foreclose - keep borrowers in their homes
Ted W. Lieu
Thursday, August 7, 2008
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/08/06/ED361269K6.DTL
If there is any silver lining to the second largest thrift failure in U.S. history, it is this: the IndyMac bank collapse has ironically resulted in the nation's first foreclosure moratorium. The Federal Deposit Insurance Corporation, after taking over IndyMac, declared it would halt all foreclosures on the $15 billon worth of IndyMac mortgages and modify the loans to keep borrowers in their homes. In one fell swoop, the FDIC did what no presidential contender, governor, or legislator has been able to do: force a moratorium on a significant number of foreclosures.
IndyMac's dramatic collapse provides two important lessons learned. First, the bank's failure reminds us that preventing foreclosures helps everyone, including those who did not participate during the mortgage boom. Representing an Assembly district with several IndyMac branches, I know that customers who lost money on their uninsured deposits did so not because of their own doing, but because of a nationwide foreclosure crisis spiraling out of control.
Tuesday, August 5, 2008
IndyMac bank run: A sign of things to come?
IndyMac bank run: A sign of things to come?
Harry Koza
July 18, 2008
http://www.theglobeandmail.com/servlet/story/LAC.20080718.RKOZA18/TPStory/Business
That's kind of odd, since it was a substantial flameout. Indy was the second-largest mortgage lender in the United States, and the seventh-largest savings and loan, with $32-billion (U.S.) in assets and $19-billion in deposits - $1-billion uninsured. It was the biggest bank failure in years. Since 2000, according to the FDIC, there have been 32 bank failures in the United States, with IndyMac the fifth one so far in 2008 and bigger than all the other 31 put together.
The FDIC has another 90 to 150 banks on its list of "troubled" lenders, so it seems likely that there will be more banks going under in the months ahead. Somehow that doesn't seem to bode too well for all those predictions of a second-half recovery this year, you know, that mythical V-shaped chart form, dipping quickly into recession only to storm back up into a new boom.
Harry Koza
July 18, 2008
http://www.theglobeandmail.com/servlet/story/LAC.20080718.RKOZA18/TPStory/Business
That's kind of odd, since it was a substantial flameout. Indy was the second-largest mortgage lender in the United States, and the seventh-largest savings and loan, with $32-billion (U.S.) in assets and $19-billion in deposits - $1-billion uninsured. It was the biggest bank failure in years. Since 2000, according to the FDIC, there have been 32 bank failures in the United States, with IndyMac the fifth one so far in 2008 and bigger than all the other 31 put together.
The FDIC has another 90 to 150 banks on its list of "troubled" lenders, so it seems likely that there will be more banks going under in the months ahead. Somehow that doesn't seem to bode too well for all those predictions of a second-half recovery this year, you know, that mythical V-shaped chart form, dipping quickly into recession only to storm back up into a new boom.
Investors Moving Money to Swiss Banks
Investors Moving Money to Swiss Banks Fearing U.S. Sub-Mortgage Crisis and IndyMac Bank Closure
Kevin Wessell
Los Angeles, CA (PRWEB) August 5, 2008
http://www.prweb.com/releases/Offshore/Banking/prweb1177124.htm
Europe has multitudes of large, safe, banks without exposure to the damaging U.S. mortgage disaster. In contrast, many U.S. banks are sitting on shaky ground. It is said that two banking giants, Washington Mutual and Bank of America - with the acquisition of Countrywide Financial - have substantial sub-prime exposure. This is not to say one should necessarily lose faith in these giant organizations. It is just to say that they are feeling the financial pain of the recent disaster. First National Bank of Nevada, based in Reno, Nevada, and First Heritage Bank of Newport Beach, Calif., were both shut down by federal regulators recently.
Kevin Wessell
Los Angeles, CA (PRWEB) August 5, 2008
http://www.prweb.com/releases/Offshore/Banking/prweb1177124.htm
Europe has multitudes of large, safe, banks without exposure to the damaging U.S. mortgage disaster. In contrast, many U.S. banks are sitting on shaky ground. It is said that two banking giants, Washington Mutual and Bank of America - with the acquisition of Countrywide Financial - have substantial sub-prime exposure. This is not to say one should necessarily lose faith in these giant organizations. It is just to say that they are feeling the financial pain of the recent disaster. First National Bank of Nevada, based in Reno, Nevada, and First Heritage Bank of Newport Beach, Calif., were both shut down by federal regulators recently.
IndyMac Collapse Fuels Fears About WaMu
IndyMac Collapse Fuels Fears About WaMu
by Wendy Kaufman
All Things Considered, July 17, 2008
http://www.npr.org/templates/story/story.php?storyId=92642046
Biggest U.S. Bank Failures: Four of the top 10 biggest failed U.S. banks and thrifts were based in California.
1. Continental Illinois National Bank, Chicago (1984) - $40 billion in assets
2. IndyMac Bank, Pasadena, Calif. (2008) - $32.2 billion (as of March 31)
3. American Savings & Loan, Stockton, Calif. (1988) - $30.2 billion
4. First RepublicBank, Dallas (1988) - $17.1 billion
5. Bank of New England, Boston (1991) - $13.4 billion
6. Gibraltar Savings, Simi Valley, Calif. (1989) - $13.4 billion
7. HomeFed Bank, San Diego (1992) - $12.2 billion
8. Southeast Bank, Miami (1991) - $11.0 billion
9. Goldome, Buffalo, N.Y. (1991) - $9.9 billion
10. City Savings (1989) Somerset, N.J. - $9.8 billion
Source: FDIC
by Wendy Kaufman
All Things Considered, July 17, 2008
http://www.npr.org/templates/story/story.php?storyId=92642046
Biggest U.S. Bank Failures: Four of the top 10 biggest failed U.S. banks and thrifts were based in California.
1. Continental Illinois National Bank, Chicago (1984) - $40 billion in assets
2. IndyMac Bank, Pasadena, Calif. (2008) - $32.2 billion (as of March 31)
3. American Savings & Loan, Stockton, Calif. (1988) - $30.2 billion
4. First RepublicBank, Dallas (1988) - $17.1 billion
5. Bank of New England, Boston (1991) - $13.4 billion
6. Gibraltar Savings, Simi Valley, Calif. (1989) - $13.4 billion
7. HomeFed Bank, San Diego (1992) - $12.2 billion
8. Southeast Bank, Miami (1991) - $11.0 billion
9. Goldome, Buffalo, N.Y. (1991) - $9.9 billion
10. City Savings (1989) Somerset, N.J. - $9.8 billion
Source: FDIC
Sunday, August 3, 2008
Will Europe Collapse Before the United States?
Will Europe Collapse Before the United States?
John Hoefle
Executive Intelligence Review
July 25, 2008
http://www.larouchepub.com/other/2008/3529europe_collapse_b4_us.html
We are not arguing that the European economy is in worse shape than that of the U.S., for both are caught in the grip of the failure of the global financial system, and both are bankrupt. What gives the United States an advantage over Europe is the superior features of the U.S. Constitutional system, which gives the U.S. Congress control over the emission of credit. In the parts of Europe dominated historically by the Venetians and the Anglo-Dutch Liberal system, private capital has always dominated governments. In the British Empire it is not the British government which rules, or even the Queen, but the City of London, and the financier slime mold which controls the City.
The U.S., on the other hand, has all the authority it needs under the Constitution to reign in these private flows of capital, giving it powerful tools with which to keep the imperial parasites at bay. Franklin Roosevelt, for example, used the power of government to break the back of the bankers during the Great Depression, paving the way for the New Deal. The hearings into the causes of the banking crisis and the legislation which followed, delivered a blow to the British-controlled House of Morgan from which it never fully recovered, sending a signal around the world that the U.S. was not only capable, but determined, to defend itself and its people.
John Hoefle
Executive Intelligence Review
July 25, 2008
http://www.larouchepub.com/other/2008/3529europe_collapse_b4_us.html
We are not arguing that the European economy is in worse shape than that of the U.S., for both are caught in the grip of the failure of the global financial system, and both are bankrupt. What gives the United States an advantage over Europe is the superior features of the U.S. Constitutional system, which gives the U.S. Congress control over the emission of credit. In the parts of Europe dominated historically by the Venetians and the Anglo-Dutch Liberal system, private capital has always dominated governments. In the British Empire it is not the British government which rules, or even the Queen, but the City of London, and the financier slime mold which controls the City.
The U.S., on the other hand, has all the authority it needs under the Constitution to reign in these private flows of capital, giving it powerful tools with which to keep the imperial parasites at bay. Franklin Roosevelt, for example, used the power of government to break the back of the bankers during the Great Depression, paving the way for the New Deal. The hearings into the causes of the banking crisis and the legislation which followed, delivered a blow to the British-controlled House of Morgan from which it never fully recovered, sending a signal around the world that the U.S. was not only capable, but determined, to defend itself and its people.
The End of the Anglo-American Empire?
The End of the Anglo-American Empire?
http://www.australia.to/index.php?option=com_content&view=article&id=348:richard-c-cook&catid=1:latest
Aug 3, 2008
Another gang has been those among the world’s money-lenders who became experts at parasitic high finance and got rich through the explosive growth of fractional reserve banking. These people have dominated the economies of nations through such institutions as the Bank of England, the Federal Reserve System, the Bank of International Settlements (BIS), and other central and commercial banks, currency and commodity exchanges, and stock and bond markets.
The bankers on the one hand and the political racketeers on the other merged over a century ago under the oversight of figures associated with the creation of the Anglo-American Empire, such as Cecil Rhodes, Lord Milner, Colonel House, Winston Churchill, the House of Windsor, and, as examples of families involved, the Rothschilds, Schiffs, Morgans, Harrimans, Rockefellers, Myers, and Bushes. Among the major projects of the empire in recent decades have been the creation and maintenance of both the kingdom of Saudi Arabia and the state of Israel as Western bridgeheads of influence, power, and wealth in the Middle East .
http://www.australia.to/index.php?option=com_content&view=article&id=348:richard-c-cook&catid=1:latest
Aug 3, 2008
Another gang has been those among the world’s money-lenders who became experts at parasitic high finance and got rich through the explosive growth of fractional reserve banking. These people have dominated the economies of nations through such institutions as the Bank of England, the Federal Reserve System, the Bank of International Settlements (BIS), and other central and commercial banks, currency and commodity exchanges, and stock and bond markets.
The bankers on the one hand and the political racketeers on the other merged over a century ago under the oversight of figures associated with the creation of the Anglo-American Empire, such as Cecil Rhodes, Lord Milner, Colonel House, Winston Churchill, the House of Windsor, and, as examples of families involved, the Rothschilds, Schiffs, Morgans, Harrimans, Rockefellers, Myers, and Bushes. Among the major projects of the empire in recent decades have been the creation and maintenance of both the kingdom of Saudi Arabia and the state of Israel as Western bridgeheads of influence, power, and wealth in the Middle East .
Central bank body warns of Great Depression
Central bank body warns of Great Depression
http://www.bankingtimes.co.uk/09062008-central-bank-body-warns-of-great-depression/
by Gill Montia
June 9, 2008
The Bank for International Settlements (BIS), the organisation that fosters cooperation between central banks, has warned that the credit crisis could lead world economies into a crash on a scale not seen since the 1930s.
In its latest quarterly report, the body points out that the Great Depression of the 1930s was not foreseen and that commentators on the financial turmoil, instigated by the US sub-prime mortgage crisis, may not have grasped the level of exposure that lies at its heart.
According to the BIS, complex credit instruments, a strong appetite for risk, rising levels of household debt and long-term imbalances in the world currency system, all form part of the loose monetarist policy that could result in another Great Depression.
http://www.bankingtimes.co.uk/09062008-central-bank-body-warns-of-great-depression/
by Gill Montia
June 9, 2008
The Bank for International Settlements (BIS), the organisation that fosters cooperation between central banks, has warned that the credit crisis could lead world economies into a crash on a scale not seen since the 1930s.
In its latest quarterly report, the body points out that the Great Depression of the 1930s was not foreseen and that commentators on the financial turmoil, instigated by the US sub-prime mortgage crisis, may not have grasped the level of exposure that lies at its heart.
According to the BIS, complex credit instruments, a strong appetite for risk, rising levels of household debt and long-term imbalances in the world currency system, all form part of the loose monetarist policy that could result in another Great Depression.
Fla. Bank Shuttered; SunTrust to Take Over Branches
Fla. Bank Shuttered; SunTrust to Take Over Branches
By David Mildenberg and Alison Vekshin
Bloomberg News
Saturday, August 2, 2008; Page D03
http://www.washingtonpost.com/wp-dyn/content/article/2008/08/01/AR2008080103409.html
The pace of closings is accelerating. Banks and securities firms have reported more than $480 billion in writedowns and credit losses since 2007, when three banks were shuttered.
Regulators in July closed IndyMac Bancorp, a California-based mortgage lender with $32 billion in assets, the third-largest bank seizure in U.S. history.
"The only thing sure other than death and taxes is that deposit insurance premiums will be going up as more banks fail," said Gerard Cassidy, an analyst with RBC Capital Markets in Portland, Maine. He expects 300 U.S. banks to fail in the next several years, mainly because of mounting losses from real estate-related loans.
By David Mildenberg and Alison Vekshin
Bloomberg News
Saturday, August 2, 2008; Page D03
http://www.washingtonpost.com/wp-dyn/content/article/2008/08/01/AR2008080103409.html
The pace of closings is accelerating. Banks and securities firms have reported more than $480 billion in writedowns and credit losses since 2007, when three banks were shuttered.
Regulators in July closed IndyMac Bancorp, a California-based mortgage lender with $32 billion in assets, the third-largest bank seizure in U.S. history.
"The only thing sure other than death and taxes is that deposit insurance premiums will be going up as more banks fail," said Gerard Cassidy, an analyst with RBC Capital Markets in Portland, Maine. He expects 300 U.S. banks to fail in the next several years, mainly because of mounting losses from real estate-related loans.
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