WSJ headlines and questions for January 11 2012

WSJ headlines and questions for January 11 2012 - In 2011,...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
WSJ headlines and questions January 11, 2012. WSJ Headline January 3. Fragile Banks Remain Afloat Only 92 banks failed in 2011, down substantially from 157 in 2010, and the pace of failures has slowed dramatically in recent months. This could occur because banks are healthier or because regulators are letting more troubled banks stay in business. Regulators deny that they are getting easier on banks, but the evidence suggests that there is some of each. Banking conditions are improving as the economy recovers and bank profits are rising. However, the number of banks on the problem bank list remains very high at 844 (more than one-tenth of the industry).
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: In 2011, 66% of failed banks were “significantly undercapitalized” (capital well below required levels) for at least 6 months, compared to 29% for 2010, suggesting that regulators are letting troubled banks languish much longer before closing them. Questions: 1. Are regulators actually getting easier on banks? Why might they do this? Why don’t they just admit it? 2. Is it a good idea to be easier on banks now? Should they have been easier during the depths of the crisis rather than now? 3. Is banking industry capacity to lend increased or decreased by closing failing banks and transferring the assets and deposits to healthier banks?...
View Full Document

This note was uploaded on 02/17/2012 for the course FINA 465 taught by Professor Berger during the Spring '11 term at South Carolina.

Ask a homework question - tutors are online