Three years after the height of the financial crisis, the issue of impaired assets on bank balance sheets remains a major risk to the health of the banking system. Regulators have allowed banks to avoid taking losses on impaired assets by not requiring mark to market accounting. The extent of overvaluation on bank loans can […]
Global Financial System Faces Worldwide Bank Runs and Failures, Citigroup’s $300 Billion Problem
October 5, 2011 By Leave a Comment
FDIC Issues 53 August Enforcement Actions On Problem Banks
September 30, 2011 By Leave a Comment
The FDIC issued a list of 53 administrative enforcement actions taken in August against problem banks and individuals. Among the enforcement actions issued were 11 consent orders, 14 civil money penalties, 1 prompt corrective action and 17 orders terminating previous prompt corrective action directives, consent orders and cease and desist orders. Please see complete list […]
$1.2 Trillion Of Nervous Money Floods Into U.S. Banking System
September 9, 2011 By 1 Comment
With the European banking system tottering on the brink of collapse, nervous holders of cash have flooded the U.S. banking system with $1.2 trillion of deposits. Panicky holders of large amounts of cash are taking advantage of a provision of the Dodd-Frank Act that provides unlimited FDIC insurance coverage on noninterest-bearing transaction accounts. The Dodd-Frank […]
FDIC Reports Decline In Problem Banks But Banking Industry Remains In Intensive Care
August 23, 2011 By Leave a Comment
The latest FDIC Quarterly Banking Profile shows a negligible decline in problem banks but the banking industry remains in intensive care. The banking industry reported a $28.8 billion profit for the second quarter which was $7.9 billion higher than last year’s quarter ending June 30, 2010. The bulk of the profit improvement, however, came from […]
S&P Downgrades US Debt – Feds Tell Banks US Securities Still “Riskless”
August 5, 2011 By Leave a Comment
The credit rating of the United States was downgraded for the first time in its history by Standard & Poor’s. The credit rating agencies had previously warned Congress that unless a credible deficit reduction plan was enacted, the United States could expect a downgrade. Standard & Poor’s reduced the US credit rating from AAA to […]
High Commission Mortgages Drive Lending Abuses
July 26, 2011 By 4 Comments
The Federal Reserve recently imposed an $85 million fine on Wells Fargo related to subprime loan origination. Fines and legal actions against banks by regulators have become routine, but the Wells Fargo case is unique for several reasons. The Federal Reserve noted that this was the first time that regulators have imposed a penalty for […]
Regulators Say Banks Have 20% Delinquency Rate On $2.6 Trillion Mortgage Portfolio
June 30, 2011 By 1 Comment
Who says the mortgage crisis is over? Regulators revealed today that the nation’s banks and thrifts have an alarming delinquency rate of almost 20% on their $2.6 trillion mortgage portfolio. The Office of the Comptroller of the Currency and the Office of Thrift Supervision jointly released the 2011 first quarter Mortgage Performance Report. The Report […]
Banking Industry Problems Persist As Revenues Decline – Quarterly Banking Profile
May 24, 2011 By 1 Comment
Confirmation of weakness in the banking industry came today with the release of the March 31, 2011 FDIC Quarterly Banking Profile (QBP). Most investors in banking stocks, with some exceptions, know that the performance of their bank stock investments has tracked the weak state of the economy and banking industry. The widely followed KBW Bank […]
Who Is To Blame For Borrowers Taking Loans They Can’t Afford?
March 3, 2011 By Leave a Comment
Ever since the mortgage crisis started in 2008, there has been a wide divergence in opinions on who was to blame for borrower defaults. Many blame greedy bankers who abdicated sound underwriting principles for financial gain by approving mortgages for unqualified borrowers. Others blame the borrowers themselves for being irresponsible and taking on debt that […]
Big Banks Profit As Smaller Banks Join Problem Bank List
February 23, 2011 By Leave a Comment
According to the latest FDIC Quarterly Banking Profile (QBF), the industry recorded profits of $87.5 billion for 2010 compared to a full-year loss of $10.6 billion in 2009. While highlighting a general improvement, the QBF shows that the banking industry still faces major challenges. Revenue growth remains weak, loan balances declined for the ninth time […]