Indymac Wasn't On Problem List. Why?
July 25th 2008 15:32
An article by Kathleen Pender in the SF Chronicle asks a great question, Why wasn't IndyMac on FDIC problem list?
Each quarter, the FDIC discloses how many banks and thrifts are on its problem list. It does not name which institutions make the list because if it did, depositors would yank out their money and they would almost surely fail.
In May, the FDIC reported that for the quarter ended March 31, the list had 90 companies with $26.3 billion in combined assets.
In May, the FDIC reported that for the quarter ended March 31, the list had 90 companies with $26.3 billion in combined assets.
Indymac had over $32 Billion of assets, so obviously it wasn't on the list.
Here's the dirty little secret:
Christopher Whalen, managing director of Institutional Risk Analytics, says "everyone expects regulators to be ahead of the curve, but they never are. It's hard for regulators to be proactive. If the FDIC was beating the hell out of IndyMac a year ago, the congressmen that represent IndyMac would have been all over them."
Here's the sobering information
Of about 9,000 institutions, "we have identified about 10 percent that are in significant distress and another 10 to 15 percent headed in that direction," he says.
Whalen says the problem list should be closer to 900 companies instead of 90.
Whalen says the problem list should be closer to 900 companies instead of 90.
Once again, we ask, how safe are your assets in a bank backed by F|DIC? Rather than rely on the government all the time, as we tend to do, why not just own some precious metals for insurance. We taxpayers would sure benefit!
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