Reuters:
Small Kansas bank is 9th failure this yearBank regulators closed Columbian Bank and Trust Company on Friday, the ninth U.S. bank to fail this year as the weakening economy and falling home prices take their toll on financial institutions.
A short story explanation of the "credit crunch" follows -
The roots of today's banking crisis grew out of the boom and bust in the real estate market. Lenders originated more and more mortgages, while other banks, particularly smaller and medium-sized institutions, ploughed money into construction and development loans.
While loan growth soared in 2004 and 2005, most regulators failed to scrutinize many banks or restrain this heady expansion of credit. Now that the loans have been made and delinquencies are climbing, some banks may already be doomed. source
The question that arises is simply this, why was there a failure by regulators to scrutinize bank mortgage lending policy. Why does this occur on Bush's watch. There's a history of banking failures during Bush administrations of old and present, how come...
3 comments:
The really massive collapses of banks lies ahead for the next pres. Same thing happened when Roosevelt got elected in 1932. He had to have a bank holiday because of the near total collapse of the banking system. Are we facing such a calamity again? Maybe? The Glass -Steagal act grew out of that long ago calamity but nobody in DC seems to have learned that lesson did they? I blame Clinton for this one. He pulled away the wall and the thieves just crowded in after that. BV$H just finished the job.
GK I am going to post on the Glass-Steagall Act. Thanks for pointing it out to me.
Your welcome. Everything and I mean everything that happened in the so called sub-prime fiasco can be tied IMHO right to the removal of this law. It allowed the banks to use their depositors $$ to play games on wall street and beyond.
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