Congratulations to the 6 newest members of the FDIC class of 2010 bank closings!


Charts courtesy of Ron Griess of The Chart Store

Category: Credit, Regulation

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

15 Responses to “FDIC Bank Closings”

  1. MikeG says:

    Is the raw number of bank closures very meaningful? Wouldn’t a tally of bank assets involved be more informative?
    On this chart, the failure of Washington Mutual counts the same as the failure of East Podunk Bank of north-central Alabama.

  2. obsvr-1 says:

    having a bubble graph that shows the asset size and cost to FDIC would be good information, however
    the fact that they are still failing is the issue and as important the number of banks that are on the FDIC watch list continues to grow; these are not ‘green shoots’ to recovery.

    FDIC is also entering into loss share agreements with the acquiring banks — would be good to see what these agreements look like per institution and aggregate contingent liability. Interesting info in the following article:!-30325-3-1.html

  3. obsvr-1 says:

    FDIC statistics

    deposit ins fund in deficit, if FDIC wanted to keep a resv ratio of 1.3 (lloks like ang when things were stable) then they are unfunded by $85B … ouch !

    15.2 (deficit) + 70 (resv) = 85B

  4. gmherger says:

    The FDIC has publicly available on the web info on closings. This is the link to the press release for one of this weekend’s failures in NJ.

    It provides the total assets, total deposits and forecast loss to the Federal Deposit Insurance Fund for the bank. The PR also has links for the loss sharing agreement and etc.

  5. rip says:

    Everyone wants a TBTF scale on bank failures. Assets.

    IMHO it’s much more important that “small” (as in not TBTF) are failing.

    These tend to be smaller “community” banks.

    Which IMHO implies the only banks that will survive are the TBTF fat cats pumping DC full of cash.

    Little guys be damned.

  6. rip,

    to your point, Chris Whalen, many Moons ago, laid it out, much, that way, with “Tough tootsies little Banks”..
    The idea, just, “6″ ‘Banks’, somehow, hit the Wall, over the last week, is absurd.

    Maybe, in ~2 years, or so, ProPublica will pen the ~definitive pice delineating the, previous, and ongoing, Fraud that the FDIC –1.) Is, and 2.) has been conducting over the interregnum.. def. #2

  7. cognos says:

    45 of the last 50 “bank failures” cost the FDIC less than $100M (including ALL 6 of these).

    Each averages less than 1% of the cost of a large bank failure.

    Why this guy (Ron Greiss) or BR doesnt post the cost stats… is beyond me. (Oh, its obvious the guy is fear mongering). Here is the link:

    The last 2 months look like the lowest in about 2 years… the one big “cost” this year was a bunch of $B banks in Puerto Rico. Outside those exotic situations… FDIC is not paying much anymore for these failures.

  8. obsvr-1 says:

    @rip Says:

    Everyone wants a TBTF scale on bank failures. Assets.

    — Reply

    By definition if a bank is failing, driven to resolution and wind down by FDIC then they are not TBTF.

    FinReg is suppose to end TBTF for all banks — time will tell if a Tier 1 Bank is put into a resolution phase. Lets hope there is discipline to follow the law when the next test (crisis) appears.


    TBTF (known as Tier 1 FHC in FinReg) is mandated to be defined, the legislation specify factors that the Federal Reserve must consider when determining whether an individual financial firm poses a threat to financial stability. Those factors should include:
    • the impact the firm’s failure would have on the financial system and the economy;
    • the firm’s combination of size, leverage (including off-balance sheet exposures), and degree of reliance on short-term funding; and
    • the firm’s criticality as a source of credit for households, businesses, and state and local governments and as a source of liquidity for the financial system.

    Propose that the Federal Reserve establish rules, in consultation with Treasury, to guide the identification of Tier 1 FHCs. The Federal Reserve, however, should be allowed to consider other relevant factors and exercise discretion in applying the specified factors to individual financial firms. Treasury would have no role in determining the application of these rules to individual financial firms. This discretion would allow the regulatory system to adapt to inevitable innovations in financial activity and in the organizational structure of financial firms. In addition, without this discretion, large, highly leveraged, and interconnected firms that should be subject to consolidated supervision and regulation as Tier 1 FHCs might be able to escape the regime. For instance, if the Federal Reserve were to treat as a Tier 1 FHC only those firms with balance-sheet assets above a certain amount, firms would have incentives to conduct activities through off-balance sheet transactions and in off-balance sheet vehicles. Flexibility is essential to minimizing the risk that an “AIG-like” firm could grow outside the regulated system.

    FinReg puts end to TBTF with NEW REGULATORY AUTHORITY: Gives federal regulators new authority to seize and break up large troubled financial firms without taxpayer bailouts** in cases where the firm’s collapse could destabilize the financial system. Sets up a liquidation procedure run by the FDIC. Treasury would supply funds to cover the up-front costs of winding down the failed firm, but the government would have to put a “repayment plan” in place. Regulators would recoup any losses incurred from the wind-down afterwards by assessing fees on financial firms with more than $50 billion in assets.

    ** No Taxpayer Funded Bailouts: Clearly states taxpayers will not be on the hook to save a failing financial company or to cover the cost of its liquidation.

  9. gorge_rider says:

    Ehm……”growing loan defaults”? How about “growing inability to ignore defaults from a while back”? This ain’t new; it ain’t getting worse necessarily; it just ain’t getting better so we can’t keep pretending it’s not bad.

  10. dbrodess says:

    how about a 6 mo moving average?
    raw and “total assets” closed

  11. cognos says:

    MEH -

    Those links you posted were worthless. Its dumb analysis, posted by ill-informed people and its 3+ months old.

    If ALL the bank failures were about to come crashing through in early June… why havent they? Why has the market gone UP about 10% since then? (And paid 50 bps in divs… more than 10x the rate of cash!)

    Bet that guy (and you, and so many others) have been saying the same thing for a year. Aint happening. Markets are up. Have been WAY up. Are going higher. Good luck staying a “broken clock”.

  12. cognos,

    I see, you’re telling me that this
    is ‘one-off’ event, yes?

    or, from here, “that the FDIC isn’t, actively, enlisting other Agents to help them clear the Pile of “REO” that they are ‘putting to Market’ ?

    and, from here that the FDIC isn’t actively staffing ‘Satellite’ Offices, from Coast-to-Coast-to-Coast, to deal with their ‘Caseload’ ?

    LSS: those links tell, well, the, still, current nature of the flim-flam-that is the FDIC..

    and, as a bonus, here..
    “…The DIF’s comprehensive loss totaled $38.1 billion for 2009 compared to a comprehensive loss of $35.1 billion for the previous year. As a result, the DIF balance declined from $17.3 billion to negative $20.9 billion as of December 31, 2009. The year-over-year increase of $3.0 billion in comprehensive loss was primarily due to a $15.9 billion increase in the provision for insurance losses, a $4.0 billion increase in the unrealized loss on U.S. Treasury (UST) investments, and a $1.4 billion decrease in the interest earned on UST obligations, partially offset by a $14.8 billion increase in assessment revenue and a $3.1 billion increase in other revenue (primarily from guarantee termination fees and debt guarantee surcharges).

    The provision for insurance losses was $57.7 billion in 2009. The total provision consists primarily of the provision for future failures ($20.0 billion) and the losses estimated at failure for the 140 resolutions occurring during 2009 ($35.6 billion).

    Assessment revenue was $17.7 billion for 2009. This is a $14.8 billion increase from 2008, and is due to the collection of a $5.5 billion special assessment in September 2009 and significantly higher regular assessment revenue. Major factors contributing to the increase in regular assessment revenue included changes to the risk-based assessment regulations, ratings downgrades of many institutions (which pushed them into higher assessment rate categories), the decline of the one-time assessment credit, and a larger assessment base…”

    that SNAFU is all Bullish Goodness, or, are its Authors, too, “a “broken clock”.” ?
    htt p://ww w.fdi

  13. obsvr-1 says:

    cognos: … Why has the market gone UP about 10% since then? (And paid 50 bps in divs… more than 10x the rate of cash!) … Markets are up. Have been WAY up. Are going higher. Good luck staying a “broken clock”.

    —- and then there is:

    Wall Street’s Great Engines of Profit Are Freezing Up