Description:Â U.S. regulators closed four banks holding less than $740 million in total assets as this yearâ€™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 agencyâ€™s website. The failures cost the FDICâ€™s deposit insurance fund $213.7 million, a fraction of last weekâ€™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.
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?