Comments on: The weak-small-bank meme http://blogs.reuters.com/felix-salmon/2010/03/18/the-weak-small-bank-meme/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: silliness http://blogs.reuters.com/felix-salmon/2010/03/18/the-weak-small-bank-meme/comment-page-1/#comment-12796 Fri, 19 Mar 2010 10:13:29 +0000 http://blogs.reuters.com/felix-salmon/?p=3000#comment-12796 In which country are “predictable and unspectacular profits year in and year out” acceptable? Well, that’s just un-American. The world is flat and we must compete globally. Right?

I’m all for predictable and unspectacular. How do we convince corporate America? We’re all about creative destruction. Predictable and unspectacular are eaten for lunch.

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By: Story_Burn http://blogs.reuters.com/felix-salmon/2010/03/18/the-weak-small-bank-meme/comment-page-1/#comment-12794 Fri, 19 Mar 2010 02:41:25 +0000 http://blogs.reuters.com/felix-salmon/?p=3000#comment-12794 What’s more scary, the Fed with more power or the Fed with more power?

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By: gramps http://blogs.reuters.com/felix-salmon/2010/03/18/the-weak-small-bank-meme/comment-page-1/#comment-12793 Fri, 19 Mar 2010 02:29:06 +0000 http://blogs.reuters.com/felix-salmon/?p=3000#comment-12793 I like local credit unions and avoid banks. Thanks, Felix, for these articles.

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By: AABender1 http://blogs.reuters.com/felix-salmon/2010/03/18/the-weak-small-bank-meme/comment-page-1/#comment-12790 Thu, 18 Mar 2010 22:27:43 +0000 http://blogs.reuters.com/felix-salmon/?p=3000#comment-12790 TARP funding, following the initial “forced issuance” to JPM, C, GS, etc, was decided with polar opposite criteria–(i) large “systemically important” problem institutions near failing and (ii) small commercial banks that were deemed by the joint regulatory committee to be strong CAMEL institutions and an ability to repay.

That is TARP funds were given to those small banks that seemingly didn’t need it and could repay it.

So the real story here is not that small banks were and are too puny to succeed, but that the smaller banks should have better repayment metrics. Those that took TARP funds and have now subsequently deferred or defaulted, apparently either (i) lied on their TARP application (UCBH?), (ii) had overly optimistic marks on their assets, (iii) had a more lenient regulatory environment in late 2008, early 2009(e.g. certain state regulators and the OTS), or (iv) had some real, negative unseeb intervening variable that materially affected their assets. I would venture that most of the unpaid TARP funds at small banks are the result of some combination of (i)-(iii).

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By: OnTheTimes http://blogs.reuters.com/felix-salmon/2010/03/18/the-weak-small-bank-meme/comment-page-1/#comment-12787 Thu, 18 Mar 2010 21:07:19 +0000 http://blogs.reuters.com/felix-salmon/?p=3000#comment-12787 too puny to succeed means that when a small bank makes the same stupid mistakes as a big one, nobody is going to bail them out. Small banks can survive as long as they don’t get greedy.

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