At the center of the economic crisis is getting toxic assets off banks balance sheets. However, the banking sector has been enjoying some gains recently, causing some to think the worst is actually over for many of these institutions. Rick Bastian tells us why he doesn’t agree.
Rick Bastian says we shouldn’t be fooled by recent gains in the banking sector. He recently participated in a round-table discussion with FDIC representatives in Milwaukee. From this, he tells us regulators continue to be concerned about economic stress in the Midwest, and are seeing an increasing number of bank failures nationwide. The banking system is so clogged with bad assets, that the authorities don have the solutions to fix the problems. As a result, regulators are asking healthy banks like Blackhawk to help out.
Bastian says the FDIC is also encouraging multiple institutions to bid on the same bank. Recent statistics show the FDIC has spent more than five billion dollars on bank failures this year, leaving slightly more than 13 billion in its coffers.