Tuesday, June 30, 2009

Banking Fact of the Day

Number of bank failures this year so far: 45 (FDIC data here, click on "Produce Report").

Total Assets of the 45 failed banks: $36.965 billion

Total Bank Assets of All 8,246 FDIC-insured banks: $13.542 trillion (data here)

Failed Bank Assets as a Percent of Total Bank Assets: .27% (or about 1/4 of 1%)


Bottom Line: The worst of the banking crisis is behind us, the percent last year was 2.69%.

16 Comments:

At 6/30/2009 2:41 PM, Blogger J.H. said...

I agree with you conclusion, but not your reasoning. The sample sizes of both bank failure totals per year are probably to small to make the comparison. (e.g. Lehman alone probably did most of the percentage of 2008)

 
At 6/30/2009 2:47 PM, Blogger Jeff Herron said...

The year ain't over yet.

With ARM resets in 2010 and 2011 and CRE's collapsing prices, many more mortgage foreclosures are still ahead of us -- which means more banks will find themselves with more liabilities than assets.

 
At 6/30/2009 4:20 PM, Blogger Expected Returns said...

Effect of Mark to Imagination Accounting: Priceless

 
At 6/30/2009 4:28 PM, Blogger Robert Miller said...

This comment has been removed by the author.

 
At 6/30/2009 5:13 PM, Blogger Bill said...

Robert: Yes because the FDIC did such a wonderful job of predicting the current situation. BTW, is it instead possible that the FDIC simply wants to scare authorities into allowing them to seize more of the wealth of banks to refill their coffers?

 
At 6/30/2009 5:28 PM, Anonymous Cheech (in) Marin said...

Deposit Insurance Fund Reserve Ratio

Number of Problem Institutions

Assets of Problem Institutions

Allowance for Loan and Lease Losses (ALLL)

 
At 6/30/2009 5:43 PM, Blogger Robert Miller said...

This comment has been removed by the author.

 
At 6/30/2009 5:55 PM, Anonymous Cheech (in) Marin said...

Oops, sorry if the links were broken folks.

All the charts are available here:

Quarterly Banking Profile

 
At 6/30/2009 9:02 PM, Blogger Bill said...

hahaha. I am anything but a conspiracy theorist. I do not however take everything the feds say at face value.

 
At 6/30/2009 9:43 PM, Blogger Robert Miller said...

This comment has been removed by the author.

 
At 6/30/2009 11:05 PM, Blogger Bill said...

And you are a jackass plagued by unwarranted arrogance. Sorry to upset you but I do not believe that the FDIC bank failure projections are accurate. That is the bottom line. And neither you nor I nor the FDIC know the future. Only time will tell who is right.

 
At 6/30/2009 11:32 PM, Blogger Robert Miller said...

This comment has been removed by the author.

 
At 7/01/2009 9:06 AM, Blogger Bill said...

Robert: I dont think you get it. The point is that, while you may know more than me about the FDIC and the FDIC bank examiners know more about individual banks than I, this does not mean that their bank failure projections are accurate. Perhaps I could have phrased my initial comment better but this was my central point. You cannot know the future. You can only make educated guesses about it which may or may not turn out to be true.

On and BTW congratulations on holding your quasi-governmental job. The most successful and insightful people in the world of finance usually gravitate towards such positions. I am glad you feel qualified to be condescending from such a lofty perch.

 
At 7/01/2009 10:24 AM, Blogger QT said...

What also is worth consideration is the consequences of the credit crisis. Wall Street's toxic message by Joseph Stiglitz.

Stiglitz raises some uncomfortable issues even if one does not altogether agree.

 
At 7/01/2009 10:30 AM, Blogger Robert Miller said...

This comment has been removed by the author.

 
At 7/01/2009 9:06 PM, Blogger Cheech said...

@QT

Joe Stiglitz is a "third way" economist like Krugman, DeLong, Blinder, Romer and others. They criticize socialism only because the criticisms are obvious and they dare not overtly admit their true beliefs. They criticize capitalism because they are, in fact socialists.

They operate under cover of "The Third Way" which is supposed to use the competitive aspects of capitalism but vigorously employ government to deal with all of capitalism's supposed shortcomings.

This crisis was in no way, shape, or form a failure of capitalism. It was the result of unprecedented interference in the housing market and financial markets by government through the Fed, Fannie Mae, Freddie Mac, HUD, Federal Home Loan Banks, the Office of Thrift Supervision, tax incentives, and political pressure on Wall Street.

For every problem guys like Stiglitz find with the free market, you can always find a government agency, program, or policy at its core.

Stiglitz and the others maintain the warped belief that socialism works when the right people implement it in moderation. The right people are always them and moderation always devolves into the extreme.

 

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