Posted by & filed under Economic Analysis.

Description:  U.S. regulators closed four banks holding less than $740 million in total assets as this year’s failures climbed to 68. Lenders in Arizona, California, Minnesota and Florida were closed by regulators and the Federal Deposit Insurance Corp. was named receiver, according to statements on the agency’s website. The failures cost the FDIC’s deposit insurance fund $213.7 million, a fraction of last week’s $7.3 billion total cost. City National Corp., the Los Angeles-based lender with $20.1 billion in assets, purchased one of the banks.

Source: Bloomberg.com
 
Date: 05/08/2010

Link: http://www.bloomberg.com/apps/news?pid=20601103&sid=aRVsqkRolq1c

Questions for discussion:

  • What is the significance of failed banks being acquired by financially stronger banks that are willing to take over their business territory?
  • Are these good financial decisions by the acquiring banks?
  • Is this an orderly system of restructuring the banking business?

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