Commentaries
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from Rolfe Winkler:
Deposit Insurance Fund, UNoffcially
I was heading out for Thanksgiving vacation when FDIC released the quarterly banking profile, so I wasn't able to update an important chart: Total Insured Deposits, Unofficially.....
(ht Stephen Culp)
When the world was falling apart, FDIC increased deposit insurance limits....to $250,000 for individual non-retirement accounts and unlimited for business transaction accounts. But those increases were treated as "temporary" and so left out of FDIC's total.
Since the $250,000 limit was extended to 2013 -- decidedly not "temporary" -- FDIC started collecting that data from its member banks. The data was published for the first time in Q3.
So in Q3, the official figure -- which includes $250k limits -- jumped from $4.8 trillion to $5.3 trillion. Throw in the $761 billion insured by the transaction account guarantee program and you've got a total of $6.1 trillion of insured deposits. Compare to Q3 '08. Back then, before all the emergency measures, the total was $4.5 trillion. So the increases added $1.6 trillion, or 34%, to the total.*
from Rolfe Winkler:
Big banks get reprieve from FDIC
Due to new accounting rules -- FAS 166 and 167 -- banks have to bring certain off balance sheet assets back onto their balance sheets starting next year. More assets, same capital = lower capital ratios. (More in this column about the individual impact on the large banks).
Anyway, the FDIC has agreed to give big banks a 6 month reprieve on raising new capital to buffer the new assets. From Ian Katz at Bloomberg:
from Rolfe Winkler:
Evening Links 12-6
(Reader note: One bug we're still trying to work out is that links in the top line of a post aren't "hot" in the front-page view of the blog. If you click "continue reading" the link is available)
The FBI agent inside the Galleon case (Goldstein, Reuters) More great work from Matt.
from Rolfe Winkler:
FDIC’s problem bank list grows to 552, DIF now negative
I'm not good at taking vacations....
FDIC published its quarterly banking profile today. Here are the latest banking industry statistics at a glance. A few interesting takeaways I'd like to highlight. First, the problem bank list grew again. And it still understates total problem assets...both Citi and Bank of American should also be on this list.
The number of institutions on the FDIC's "Problem List" rose to its highest level in 16 years. At the end of September, there were 552 insured institutions on the "Problem List," up from 416 on June 30. This is the largest number of "problem" institutions since December 31, 1993, when there were 575 institutions on the list. Total assets of "problem" institutions increased during the quarter from $299.8 billion to $345.9 billion, the highest level since the end of 1993, when they totaled $346.2 billion. Fifty institutions failed during the third quarter, bringing the total number of failures in the first nine months of 2009 to 95.
from Rolfe Winkler:
Bubble-wrapping the China shop
Do you think we should establish a government-backed insurance fund for big banks' risky trading activities? Probably not. But that's precisely what the administration and Congress agree should be done. Today Sheila Bair proposed her own variation on the theme. At first glance her idea sounds better, but it's just as bad as the others.
From Alison Vekshin at Bloomberg:
Federal Deposit Insurance Corp. Chairman Sheila Bair, breaking with the Obama administration, said U.S. financial companies should prepay into a fund the government would use to unwind large failed firms.
from Rolfe Winkler:
Sheila throws GMAC a bone
GMAC sold more FDIC-backed debt today... (Reuters)
General Motors Acceptance Corp on Wednesday sold $2.9 billion in three-year government-guaranteed notes, according to a market source familiar with the sale. The 1.75 percent notes were priced at 99.991 to yield 1.753 percent, or 31.6 basis points over comparable U.S. Treasuries.
The notes are guaranteed under the Federal Deposit Insurance Corp's temporary liquidity guarantee program.
from Rolfe Winkler:
#100….and counting (+ charts)
Another failure in Georgia. And two in Naples.
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Failed bank: Partners Bank, Naples FL
Acquiring bank: Stonegate Bank, Ft. Lauderdale FL
Vitals: as of 9/30, assets of $66 million, deposits of $65m
DIF damage: $28.6m
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Failed bank: American United Bank, Lawrenceville GA
Acquiring bank: Ameris Bank, Moultrie GA
Vitals: as of 8/11, assets of $111 million, deposits of $102m
DIF damage: $44m
Calling Geithner
Good work by the AP in getting a copy of Treasury Secretary’s Tim Geithner’s phone log, which shows that he was quite busy during the first-half of the year speaking to Wall Street bankers. These stories are fun reads and I recently did one based on FDIC Chairwoman Sheila Bair’s datebook.
To me, the most interesting thing to come out of the Geithner call list is the revelation that he spoke several times with both Citigroup Chairman Dick Parsons and Citi CEO Vikram Pandit. Now, given the dicey situation Citi is in, that’s not surprising. But compare this to Bair’s dealings with Citi–in which she all but kept Pandit at arms length this summer.
Sheila Bair and the black marker
The other day I wrote a column about a series of meetings FDIC Chairwoman Sheila Bair had this summer with Citi Chairman Dick Parsons. The column was based on entries in Bair’s datebook, a copy of which the FDIC turned over to me in response to a FOIA request.
But here’s the thing, the FDIC actually tried to keep some of those meetings between Bair and Parsons secret–along with a number of other meetings the FDIC chairwoman had this summer. The FDIC said it needed to redact some of the entries to protect the agency’s work with the banks it regulates. The agency did this by using a simple black marker to cover over the names of some people.
Geithner of Oz
Earlier today I wrote that Sheila Bair is one of the few financial regulators who gets it. And by getting it, I mean not sucking up to the banks and the big money interests on Wall Street. You know, the guys (and most of them are guys), who got us into this financial mess. Tim Geithner, on the other hand, is a regulator who just doesn’t get it.
It’s not that the Treasury secretary isn’t smart–he is. And it’s not that he’s not up to job–he is. It’s that Geithner is too much of a politician and his views have been molded by people who work on Wall Street.
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The Wall
