Jan 6 2011

FDIC and US banking industry continued insolvency – 11 percent of US banks are labeled as troubled financial institutions. CEO on the record of exporting American middle class.

The US banking system is largely a system based on consumer confidence.  You would require the confidence of Zeus if you had $13.3 trillion in assets backed by an FDIC Deposit Insurance Fund (DIF) that is practically insolvent.  Even as the stock market solidly recovers to the green the state of the average American’s financial […]

Dec 8 2010

The era of mega banks – The growth of too big to fail. American banking system still backing over $13 trillion in assets with a negative deposit insurance fund. 7,760 banks but 19 banks make up 50 percent of the asset base.

The growth of the too big to fail bank is something that is modern to this era.  In the 1990s there were fewer than 40 institutions that had total assets above $20 billion.  In the late part of the 1980s and 1990s this number was below 20.  The peak was reached in 2005 with 55 […]

Oct 13 2010

The hidden gigantic risk of derivatives – Top 77 U.S. banks have their hand in $225 trillion in derivatives. The top 5 banks hold $7.8 trillion of all banking assets growing their asset base by $1.7 trillion from 2007.

The concentration of banking risk in the United States is immense.  The Federal Reserve and U.S. Treasury like to convey a pretense that we have a very diverse banking system with over 7,800 banking institutions.  In the mind of most of the public, this seems like a very diverse industry.  Imagine having 7,800 different kinds […]

Oct 9 2010

Bank of America has $2.3 trillion in assets but $956 billion of that is made up in loans. Think those loans are valued at current market levels? The FDIC would have a challenge even breaking up one too big to fail bank.

The FDIC has a herculean challenge in confronting the too big to fail banks.  There is little doubt that having institutions that are too big is part of the reason for the current systemic crisis.  Yet through the last few years the solution has been to make these banks even bigger allowing their web to […]

Sep 1 2010

FDIC holding banking system by a thread – $13.2 trillion in assets backed by -$15.2 billion Deposit Insurance Fund. 19 Banks hold 50 percent of all banking assets out of 7,830 institutions. What needs to be done to restore the banking system for the American public.

It was interesting to see the spin regarding the FDIC quarterly report this week.  The report was largely a reflection of the way we now categorize profits in the banking system.  Banks made a nice amount of profit through trading securities (on bailout leverage) while at the same time cutting back the amount of capital […]

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