Heard a piece on NPR about FDIC...

[Bigmack]

taking over a failed bank. Apparently, nobody at the bank knew the end was coming.

It occurred to me later... 1)How did the FDIC know the bank was in deep shit?
and: 2)How come the BANK didn't know it was in deep shit?... they were surprised when FDIC took over.

If it's a matter of numbers reported to somebody.... why isn't the FDIC closing down some of the big guys? I understand
the big guys balance sheets look bad, too.

[Orrex]

1. Did they mean that nobody at the failed bank knew that it was coming?

Or that nobody at a particular branch of the failed bank knew that it was coming?


If the former, I confess that I'm baffled. If the latter, I'm not at all surprised...

[Bigmack]

3. There were only two branches... nt

[Orrex]

4. Well then that makes no sense at all

If I ran one of two sandwich shops owned by the same partnership, I think I'd be able to tell when the shop was circling the drain.


Very strange.

[TreasonousBastard]

2. Heard that same piece a while ago, and...

if I remember, the branch and customers were taken by surprise. The FDIC gets regular reports from and about the bank and does what it does on the basis of those. Some people at the bank know it's coming, but not everybody.

The end comes fast because, well, just think about what would happen if they announced "On Tuesday, we're closing down Sheepdip National Bank."

Customers would panic and there would be a run on the bank, or they might do dumb stuff like write tons of bad checks thinking they wouldn't get caught. Employees could either panic or steal anything not nailed down.

Big guys ain't easy to close down-- just how many FDIC employees are there to deal with a bank with a thousand branches and millions of accounts? It's easier to get a bigger fish to eat them and deal with the problems.