[RT] Fw: [TimeandCycles] "Too big to fail" bank fails

[Ben <profitok@xxxxxxxxxxxxx>]

 

----- Original Message -----

From: bearlythere4444

Sent: Friday, May 01, 2009 5:03 PM

Subject: [TimeandCycles] "Too big to fail" bank fails

As far as I can tell, this was after the close.

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ATLANTA -- Federal regulators shut down Silverton Bank in Atlanta on Friday, a move that could shake the already fragile condition of hundreds of other banks in the Southeast.

The Federal Deposit Insurance Corp. estimated the failure would cost its deposit insurance fund $1.3 billion. Silverton's condition was so poor that the FDIC could not find a buyer.

With $4.1 billion in assets, Silverton is the fifth largest bank to fail since the financial crisis intensified in 2008. Its impact could be profound. It provides services to one out of every five banks in the country, and its customers, depositors, and investors are all banks. It did not take deposits from the general public or make loans to consumers.

Some Georgia bankers argued to FDIC officials that Silverton was actually "too big to fail" because they said that its collapse could take at least 8 to 12 banks down with it. Roughly 400 banks are investors in Silverton Bank, and it clears payments and participates in loans with more than 1,000 lenders. It is the largest bankers' bank in the country.

http://online.wsj.com/article/SB124120864450778329.html?mod=googlenews_wsj

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