Unformatted text preview: 7. Continental had problem loans outstanding in several depressed sectors: a. energy sector b. ag sector c. LDCs—Mexico, Brazil, Venezuela, etc. 8. Rumors started to float that bank was in trouble. Huge run on bank by holders of negotiable CDs. $9 billion liquidation. Liquidity crisis for the bank. 9. Gov’t swooped in and closed the bank. Package to protect depositors included $5 billion loan from Fed, $5.5 billion from consortium of large U.S. banks, and $2 billion from U.S. govt. ContnenTal Illinois Bank Liabilites AsseTs Cash and Dep aT Fed $0.3 B DDO $3 B Loans $24 B SD $3 B ± Bills $1 B NEG CDs $24 B ± and Municipal Bonds $6 B ±oTal Liabilites $30 B ±oTal AsseTs $31.3 B CapiTal $1.3 B...
View Full Document
- Fall '08
- Sociology, loan growth, Continental Illinois Bank, percent annual loan