Showing posts with label banking. Show all posts
Showing posts with label banking. Show all posts

PostHeaderIcon Worst bank closures: 106 banks shut down in 2009

10/26/2009 | Posted by mesiamd | Edit Post


Clues of More Financial Hardtimes Ahead?

This year’s bank closures are the worst since 1992 during the savings and loan crisis. A total of 106 banks have been shut down by regulators of the Federal Deposit Insurance Corp (FDIC) this year. Because of the closures, it will cost FDIC about 25 billion dollars to shore up the banking system. The cost could reach $100 billion by year 2013. Just this weekend 7 banks have been shut down:

“1. Flagship National Bank, Bradenton, Florida. The FDIC entered into a purchase and assumption agreement with First Federal Bank of Florida, Lake City, Florida, to assume all of the deposits of Flagship National Bank. As of August 31, 2009, Flagship National Bank had total assets of $190 million and total deposits of approximately $175 million. In addition to assuming all of the deposits of the failed bank, First Federal Bank of Florida agreed to purchase essentially all of the assets. Total cost to the FDIC: $59 million.

2. Hillcrest Bank Florida, Naples, Florida, was closed by the Florida Office of Financial Regulation. The FDIC entered into a purchase and assumption agreement with Stonegate Bank, Fort Lauderdale, Florida, to assume all of the deposits of Hillcrest Bank Florida. As of October 1, 2009 , Hillcrest Bank Florida had total assets of $83 million and total deposits of approximately $84 million. Stonegate Bank will pay the FDIC a premium of 0.50 percent to assume all of the deposits of Hillcrest Bank Florida. In addition to assuming all of the deposits of the failed bank, Stonegate Bank agreed to purchase $28 million of the failed bank's assets. The FDIC will retain the remaining assets for later disposition. Total cost to the FDIC: $45 million.

3. Partners Bank, Naples, Florida, was closed by the Office of Thrift Supervision. The FDIC entered into a purchase and assumption agreement with Stonegate Bank, Fort Lauderdale, Florida, to assume all of the deposits of Partners Bank. As of September 30, 2009, Partners Bank had total assets of $65.5 million and total deposits of approximately $64.9 million. Total cost to the FDIC: $28.6 million.

4. American United Bank of Lawrenceville, Georgia, whose deposits will be assumed by Ameris Bank, of Moultrie, Georgia. As of August 11, 2009, American United Bank had total assets of $111 million and total deposits of approximately $101 million. Ameris Bank will pay the FDIC a premium of 1.02 percent to assume all of the deposits of American United Bank. In addition to assuming all of the deposits of the failed bank, Ameris Bank agreed to purchase essentially all of the assets. Total cost to the FDIC: $44 million.

5. First Dupage Bank, Westmont, Illinois, was closed today by the Illinois Department of Financial & Professional Regulation -- Division of Banking. To protect the depositors, the FDIC entered into a purchase and assumption agreement with First Midwest Bank, Itasca, Illinois, to assume all of the deposits of First Dupage Bank. The sole branch of First Dupage Bank will reopen on Saturday as a branch of First Midwest Bank. As of July 31, 2009, First Dupage Bank had total assets of $279 million and total deposits of approximately $254 million. In addition to assuming all of the deposits of the failed bank, First Midwest Bank agreed to purchase essentially all of the assets. Total cost to the FDIC: $59 million.

6. Riverview Community Bank, Otsego, Minnesota, was closed today by the Minnesota Department of Commerce. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Central Bank, Stillwater, Minnesota, to assume all of the deposits of Riverview Community Bank. As of August 31, 2009, Riverview Community Bank had total assets of $108 million and total deposits of approximately $80 million. In addition to assuming all of the deposits of the failed bank, Central Bank agreed to purchase essentially all of the assets. Total cost to the FDIC: $20 million.

7. Bank of Elmwood, Racine, Wisconsin, was closed today by the Wisconsin Department of Financial Institutions. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Tri City National Bank, Oak Creek, Wisconsin, to assume all of the deposits of Bank of Elmwood. Bank of Elmwood had total assets of $327.4 million and total deposits of approximately $273.2 million. Tri City National Bank did not pay the FDIC a premium for the deposits of Bank of Elmwood. In addition to assuming all of the deposits of the failed bank, Tri City National Bank agreed to purchase essentially all of the assets. Total cost to the FDIC: $101.1 million. “---ConsumersAffairs.com (10/24/09, Bosworth, M.)

Bank officials expect more closures to extend till 2012. Taking the option to close in order to avoid public panic, many smaller banks are hard hit by delinquency in loan payments, falling home values, and worsening unemployment of about 10%.

As a result of bank failures, the insurance fund of the FDIC is in danger of being depleted. Financial analysts believe the projected recovery between 2010 to 2013 will not be as robust as the optimism expressed by the Obama administration. (Photo Credit: Debtfree/ Daniloff) =0=

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PostHeaderIcon G20 Summit & the protests in London streets

4/02/2009 | Posted by mesiamd | Edit Post


The Group of Twenty (G20)

“The Group of Twenty (G-20) Finance Ministers and Central Bank Governors was established in 1999 to bring together systemically important industrialized and developing economies to discuss key issues in the global economy. The inaugural meeting of the G-20 took place in Berlin, on December 15-16, 1999, hosted by German and Canadian finance ministers.

The G-20 is an informal forum that promotes open and constructive discussion between industrial and emerging-market countries on key issues related to global economic stability. By contributing to the strengthening of the international financial architecture and providing opportunities for dialogue on national policies, international co-operation, and international financial institutions, the G-20 helps to support growth and development across the globe.

The G-20 is made up of the finance ministers and central bank governors of 19 countries: Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom and the United States of America, and also the European Union who is represented by the rotating Council presidency and the European Central Bank.”----Source: http://www.g20.org/



Meeting in London, UK

The G20 leaders of major economies worldwide are meeting in London to thresh out measures to solve the conomic crisis. The one day summit on April 2, 2009 will be attended by countries from where ¾ of the earth's people live and generate 80% of the world’s trade. They will focus on reforming rules of international banking, investments and trade, funding to stimulate the economy, and oversight over the global markets---to stave off the effects of the worsening economy.

France’s Pres. Nicolas Sarkozy earlier threatened to leave the conference if leaders can’t come up with a strong international regulation of the financial markets which is opposed by Britain and the United States. China’s Central Bank governor Zhou Xiaochuan and Finance Minister Xie Xuren called for reforming the international financial system, with Zhou adding a proposal to replace the dollar as the global currency. IMF Dominique H. Strauss and Brazilian Pres. Luis Inacio Lula da Silva think having a global currency other than the US dollar is a reasonable idea.

Earlier, da Silva decried that poor countries had to suffer because of the mistakes of rich nations and the crisis is caused by “white people with blue eyes” who appeared all-knowing before the economic downturn.

Attending the summit with big promise because of his popularity, US President Barack Obama, comes with a huge baggage of spending --- an over-bloated domestic budget that puts taxpayers money in line and the finances of future generation. A growing number of Americans are pessimistic that Obama will succeed in countering the economic meltdown that treathens to bankrupt America. There is disapproval to his aggressive government regulation and overspending.

Many G20 nations question how America, bogged by astronomical budget deficits and debts and blamed for the bad economy, is using its dollar to bring health to the economy. With differing suggestions to solve the crisis, leader attendees have to work beyond mere cooperation.

The heads of state from the top industrial nations are met with opposition from about 1,200 anti-capitalists, anarchists, and environmental groups in the British capital. People frustrated with the economic slump battle truncheon-wielding policemen with knives, stones, and eggs. At the eve of the meeting, an angry protester held a placard which says, “It’s our money that they have stolen.”

There is a mix of high expectation and pessimism for this summit. Confidence in the financial system is low. Poor and developing countries, some on the edge of collapse, are alarmed that a protracted money crisis can push economies to fall and cause instability and chaos.

Setting aside $250 billion as a rescue fund to bail out fragile economies has been proposed. "I'm going to ask the G20 summit to support a global expansion of trade finance of at least $100 billion to help revive trade in all parts of the world," said British Prime Minister Gordon Brown. (Photo Credit: Ben Heine x 2) =0=

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PostHeaderIcon Longer recession blues as more jobs are lost in USA

12/05/2008 | Posted by mesiamd | Edit Post
As the first week of December ends, Americans are bracing for bleaker economic news today as the report of joblessness from last November will be released by the Labor Department.

From October’s 6.5%, the unemployment rate is expected to rise to about 6.8% as more pink slips for laid-off workers, estimated to be about 320,000, are issued as the Christmas holiday closes in.

“Just in recent days, household names like AT&T Inc., DuPont, JPMorgan Chase & Co., as well as jet engine maker Pratt & Whitney, a subsidiary of United Technologies Corp., and mining company Freeport-McMoRan Copper & Gold Inc. announced layoffs.”---AP (12/05/08, Aversa, J)

It is said that since the start of the year 1.2 million jobs have been lost. It is feared that this can further aggravate the financial woes being suffered by the three big US auto companies: General Motors Corp (GM,) Chrysler LLC and Ford Motor Co.

Partly due to confusion, anger, and lack of knowledge, ordinary Americans are divided if bail outs of these companies are the solution to the problem. Capitol Hill is still weighing in whether to give the $34 billion asked for by the auto industry managers for their company's survival.

The guarantee of tax-payers’ money to rescue these failing companies are the last that Americans want, but they seem to have little options. With a national debt of about $10.7 trillion dollars, America still talks big about money and spending. There are those who have been not been roused to the reality that the economy is truly in bad shape.

But, the conscientious public is thinking whether the nation can afford the extravagance, greed, and recklessness its leaders and citizens have been used to. In spite of assurances, the competence and ethical integrity of those running America are now being questioned. The issue of confidence in the American system is causing ripples in business circles worldwide.

As predicted by many business analysts, USA is likely to be stuck for a long haul in a deep recession whose post-war average duration is 10 months, the longest at 16 months. This December marks the 12th month of the current recession whose existence has been muddled for sometime by economic experts until just recently.

At the disclosure of the recession, President-elect Barack Obama announces a 2.5 million job generation plan which may cost the government $500 billion to finance. The staggering amount make the ordinary citizens dizzy as the new administration is headed for a glittery inaugural bash in January 20, 2009.

Confidence on America's leaders has been under the cloud of doubt since the down-turn of the stock market and the failure of banking and housing industries. Next comes the the auto industry. The fall-out of these economic troubles to the world in spite of optimistic assurances isn’t completely known, but many are hurting and many more are going to be hurt. (Photo Credits: wwww.fortunewatch.com) =0=

RELATED BLOGS: "Mr. Fix & the tall challenge to keep USA & the world to believe that we can quickly come out of the financial mess" Posted by mesiamd at 11/22/2008; "Like Filipinos, Americans Have Money Troubles Too!" Posted by mesiamd at 7/16/2008
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