Tag: bank failures

Economy, Innovation

Bank deposits – the hidden risk associated with government guaranteed deposits

Colin Henderson

The focus on bank financial strength is generally on the lending side of the business and the potential for bad debts.  Here is another view, and something that drives some banks to make ever riskier loans to produce enough revenue to pay for their deposits. For Banks, Wads of Cash and Loads of Trouble | NY Times The 79 banks that have failed in the United States over the last two years had an average load of brokered deposits four times the national norm … But the hot money also came with a high cost. To lure the money from … Continue reading Bank deposits – the hidden risk associated with government guaranteed deposits

Business Models

Risk of bank default is back to Sept 08 / Lehman failure levels

Colin Henderson

Following along on the theme of what to do with the top banks, this indicator tells us the work to date has failed.  All that money being placed in banks is not reducing the expected risk.  This is a serious matter and inappropriate methodology of use of government (US, Canada, UK and European) funds.  It points to nationalisation as one alternative option to the current use of funds. The cost of insuring against a bank default – that means a bank going out of business and this is for the top banks, Bank of America, UBS, Barclays, Lloyds etc, is … Continue reading Risk of bank default is back to Sept 08 / Lehman failure levels