FDIC: FIL-62-2008: Guidance on Other Real Estate
Posted on | May 9, 2010 | No Comments
FDIC: FIL-62-2008: Guidance on Other Real Estate.
Bailout Effort’s Cost Starts to Ease – WSJ.com
Posted on | May 9, 2010 | No Comments
For example, the U.S. government still is providing crucial support for financial and housing markets. And there is one glaring exception to the encouraging trend of wards of the state getting back on their feet: Housing giants Fannie Mae and Freddie Mac, with $125.9 billion in direct injections from the government, are expected to rely on federal coffers for years. They have an unlimited U.S. credit line.
According to the CBO, losses related to the investment portfolios of Fannie Mae and Freddie Mac are projected to total $370 billion through 2020, though the figure will fluctuate depending on the health of the housing market. The Treasury's $89 billion estimate for the total bailout cost doesn't incorporate CBO's projected losses at Fannie and Freddie because, for budgeting purposes, the Obama administration technically considers them private entities. Taxpayers are potentially on the hook for losses at Fannie and Freddie.
via Bailout Effort’s Cost Starts to Ease – WSJ.com.
Bank Failure: Two Brief Notes – Paul Krugman Blog – NYTimes.com
Posted on | May 9, 2010 | No Comments
1. Some commenters on this blog have argued that lots of small banks failed in Georgia, without systemic consequences. But these banks weren’t allowed to collapse; they were seized by the FDIC — in effect, nationalized — and their depositors were protected. That is, in effect they were rescued, although the stockholders were cleaned out.
2. Other commenters say that lessons from the 1930s are no longer relevant, because now we have deposit insurance. Um, shadow banking? That’s the point I keep trying to make: what happened to us in 2007-8 was that a large banking system had grown up, relying on repo and other forms of short-term borrowing rather than deposits, that wasn’t covered by New Deal-era protections and regulation. So what we had was the 21st-century version of a bank run; not crowds of people lining up at bank doors, but crowds of investors demanding haircuts on repo, which has the same effect.
via Bank Failure: Two Brief Notes – Paul Krugman Blog – NYTimes.com.
Fed Shouldn’t Reveal Crisis Loans, Banks Vow to Tell High Court – Bloomberg.com
Posted on | May 9, 2010 | No Comments
The central bank contends that 231 pages of daily reports summarizing lending activity, which were prepared by the Federal Reserve Bank of New York for the Fed Board of Governors in Washington, aren’t covered by the FOIA. The statute obliges federal agencies to make government documents available to the press and the public. The suit doesn’t seek money damages.
via Fed Shouldn’t Reveal Crisis Loans, Banks Vow to Tell High Court – Bloomberg.com.
Tags: Bailouts > Federal Reserve > Financial Crisis > Transparency
Op-Ed Columnist – Bank Failures – Why Georgia? – NYTimes.com
Posted on | May 9, 2010 | No Comments
Can’t say I agree with this.
[T]he contrast between Texas and Georgia suggests that consumer protection is an essential element of reform. By all means, let’s limit the power of the big banks. But if we don’t also protect consumers from predatory lending, there are plenty of smaller players — both small banks and the nonbank “mortgage originators” responsible for many of the worst subprime abuses — that will step in and fill the gap.
via Op-Ed Columnist – Bank Failures – Why Georgia? – NYTimes.com.
Defaults Rise in Federal Loan Modification Program – NYTimes.com
Posted on | May 9, 2010 | No Comments
The number of homeowners who defaulted on their mortgages even after securing cheaper terms through the government’s modification program nearly doubled in March, continuing a trend that could undermine the entire program.
via Defaults Rise in Federal Loan Modification Program – NYTimes.com.
Regulators Seize Four Banks – WSJ.com
Posted on | March 29, 2010 | No Comments
The first Georgia bank to close was McIntosh Commercial Bank of Carrollton, the Federal Deposit Insurance Corp. said. McIntosh Commercial, which had four branches, had about $362.9 million in assets and $343.3 million in total deposits as of Dec. 31, 2009, according to the FDIC.
CharterBank of West Point, Ga., agreed to assume all of McIntosh Commercial deposits through a deal with the FDIC. Under the deal, the FDIC and CharterBank will share in losses on about $263.1 million of McIntosh Commercial's assets. The four branches of McIntosh Commercial Bank will reopen Saturday as branches of CharterBank. The FDIC estimated the failure will cost its deposit-insurance fund $123.3 million.
via Regulators Seize Four Banks – WSJ.com.
Auditors of failed banks got bonuses | The Augusta Chronicle
Posted on | March 28, 2010 | No Comments
Auditors of failed banks got bonuses | The Augusta Chronicle.
Bankstocks.com
Posted on | March 28, 2010 | No Comments
I can’t say I agree with the tone of the letter, but with the underlying principle I do. Among other things, this could encourage more default rates by conveying to borrowers that they won’t be punished by not repaying their loans. Of course, the forgiven principal will be taxed, so hopefully BofA will extend additional credit to the borrowers to pay their taxes.
After news emerged yesterday that Bank of America will modify delinquent borrowers’ loans via forgiveness of principal, a reader forwarded me this open letter to CEO Bryan Moynihan. I agree with every word. –TKB
via Bankstocks.com.
03-10-2010 – Merkley, Levin, Kaufman, Brown, Shaheen Introduce Legislation to Restrict Banks and the Largest Financial Institutions from Making High-Risk Bets : Senator Carl Levin: News Release
Posted on | March 13, 2010 | No Comments
This essentially looks like it will repeal a good deal of the Gramm-Leach-Bliley Act, which was adored by politicians at the time. I wonder how many of them voted in favor of GLB and are now condemning it? And I love that a Senatorial press release includes the phrase “Investors got hosed.”
“Congress has to draw hard lines to deal with ‘too big to fail’ and prevent another financial crisis. We must restore the wall between federally insured banks and risky proprietary trading,” said Kaufman.
“For years, investment banks packaged and sold toxic financial products and then used their own money to bet against these products. Banks got rich, investors got hosed, and taxpayers got stuck with the bill. It’s time for Congress to rein in Wall Street greed and end these conflicts of interest,” said Brown.
Specifically, the bill:
- Bars banks, bank holding companies, and their affiliates and subsidiaries from engaging in high risk speculation involving any stock, bond, option, commodity, derivative, or other security or financial instrument. Also bars those entities from investing in or sponsoring a hedge fund or private equity fund.
- Requires large, important nonbank financial institutions to set aside additional capital to discourage them from engaging in high-risk speculation and investing or sponsoring hedge funds or private equity funds. The bill also puts strict limits on the amount of such speculation.
- Prohibits securities brokers from betting against the packages of loans (asset-backed securities) they are promoting to their clients.
Tags: Derivatives > Economics > Legislation > Politics > Regulation > Speculation