Busted: Bankers and The Global Economy

August 30, 2008

FDIC Prepares for Banking Slaughter

The FDIC is seriously considering its future workload by expanding offices in Dallas, Texas that handle banking closures. However, the FDIC is trying to indicate that the 125,000 foot expansion is due to an increase in workload from the failure of ten banks this year, completed yesterday with the closing of Integrity Bank of Alpharetta, Georgia. 117 banks are now on the FDIC trouble list. The FDIC says that “it’s important to note most banks on the problem list will either cure themselves or end up being acquired by another company.” That is true. What is also true is that many failed banks don’t show up on the list at all. The silver lining in the situation is the number of government jobs that will be needed in the Dallas Metroplex area.

The FDIC reports that non-interest income at banks waned as trading and securitization services slowed. That is an understatement to be certain.

Sheila Bair reported: “We’ll be proposing changes to the current assessment system that will shift a greater share of any assessment increase onto institutions that engage in high-risk behavior to encourage and reward safer behavior.” The lack of honest information from banks has been and continues to be the Achilles heel in FDIC efforts. Fraudulent banking is reported as up by corporate information specialists while government regulators play down the significance of fraud and failure. The fear is palpable, but regulators are full of blather in an effort to convey confidence. ~ E. Manning

Check out an interesting article at RGE Monitor.

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