Will 1,000 Banks Fail in the Next Two Years?
There is a good chance that we will see more bank failures in the next two years, say some experts in the financial field. This is because smaller banks and private banks are starting to see some troubles from the current economic climate. CNBC reports on the possibility of more more failed banks:
Failed banks tend to be smaller and private, which exacerbates the problem for small business borrowers, said Kanas, who became CEO of BankUnited when his firm bought the bank and is the former chairman and CEO of North Fork bank.
“Government money has propped up the very large institutions as a result of the stimulus package,” he said. “There’s really very little lifeline available for the small institutions that are suffering.”
We have seen the big guys get all sorts of Federal help. Their special financing has allowed many of the struggling big banks survive. Indeed, these banks were able to turn large enough profits in the last couple of quarters that they have been able to pay back their bailout funding with interest.
The news about continued bank failures for smaller institutions could affect businesses and would-be homeowners. With the big guys refusing to loan, many have turned to smaller regional and local banks. Up until now, many of these have been doing okay, since they did not engage in some of the risky practices seen by the biggest banks. However, the recession is taking its toll. And without these smaller banks to provide financing things get harder for business and individuals who need some money.
It will be interesting to see whether 1,000 banks really do fail in the next two years. So far, 81 banks have failed this year. The pace would really have to pick up for 1,000 to be reached. But it is still something that bears some thought.
[...] Will 1,000 Banks Fail in the Next Two Years? There is a good chance that we will see more bank failures in the next two years, say some experts in the financial field. This is because smaller banks and private banks are starting to see some troubles from the current economic climate. CNBC reports on the possibility of more more failed banks: Failed banks tend [...] [...]