Bank Failure Friday - Just one this week, toll now 124

Who would think good news would mean just one bank failure in Florida.

Commerce Bank had assets of $79.7 million and total deposits of about $76.7 million, the FDIC said. The FDIC and Central Bank entered into a loss-share transaction on about $61 million of Commerce Bank's assets. The failure is expected to cost the FDIC's insurance fund $23.6 million.

Meanwhile, the New York Times has a good piece, The Pathology of a Financial Crisis.

At bank after bank, the examiners are discovering that state and federal regulators knew lenders were engaging in hazardous business practices but failed to act until it was too late. At Haven Trust, for instance, regulators raised alarms about lax lending standards, poor risk controls and a buildup of potentially dangerous loans to the boom-and-bust building industry. Despite the warnings — made as far back as 2002 — neither the bank’s management nor the regulators took action. Similar stories played out at small and midsize lenders from Maryland to California.

What went wrong? In many instances, the financial overseers failed to act quickly and forcefully to rein in runaway banks, according to reports compiled by the inspectors general of the four major federal banking regulators. Together, they have completed 41 inquests and have 75 more in the works.

So, in other words, it appears no regulators were really doing their jobs and that's with existing laws and regulations.

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