MarketWatch: Bank failures to surge in coming years

[marmar]

Bank failures to surge in coming years
IndyMac, Corus, UCBH under pressure as credit crunch slows economy
By Alistair Barr, MarketWatch


SAN FRANCISCO (MarketWatch) -- By April, Gary Holloway was almost three years into retirement.
He'd built a new home by a lake in Texas, bought a boat and was working on his golf game. While taking on some part-time work, Holloway also traveled for months across the U.S. with his wife, from Seattle to Washington D.C., catching up with old friends and family.

That life of leisure abruptly changed about six weeks ago when Holloway got a phone call from his former employer, the Federal Deposit Insurance Corp., or FDIC, which regulates U.S. banks and insures deposits.

Holloway, a 30-year FDIC veteran, had worked extensively with failed lenders in Houston during the savings and loan crisis in the late 1980s and early 1990s, when thousands of thrifts collapsed.
Earlier this year, the FDIC began trying to lure roughly 25 retirees like Holloway back to prepare for an increase in bank failures. It's also hiring about 75 new staff.

Holloway quickly went back to work. ANB Financial N.A., a bank in Bentonville, Ark. with $2.1 billion in assets and $1.8 billion in customer deposits, was failing and an expert like Holloway was needed to value the assets and find a stronger institution to take them on.

"I was very excited about coming back," Holloway said in an interview. "I'm now 57. There's still a lot of life left and the juices are flowing again."

On May 9, life for ANB ended when the FDIC and the Office of the Comptroller of the Currency, another bank regulator, announced that the lender was closing.

Only three banks have failed so far in 2008. But that number is set to surge as the credit crunch slows economic growth and hammers some lenders that grew too fast during the recent real-estate boom, experts say. ......(more)

The complete piece is at: http://www.marketwatch.com/news/story/bank-failures-surge-credit-crunch/story.aspx?guid=%7B2FCA4A0C%2D227D%2D48FE%2DB42C%2D8DDF75D838DA%7D

[xchrom]

1. recommend

[marmar]

2. After-work kick.....

:kick:

[Wilms]

3. Everything is a "surge" these days.

:sigh:

[Selatius]

4. I wonder if the FDIC is equipped to deal with en masse bank failures if it comes to that.

They may be able to absorb some of the impact, but I doubt they could take all the blows.