More collapsing banks could mean more ‘too big to fail’ banks
Daniel Tencer — Raw Story
The $700-billion bank bailout, launched in the final months of the Bush administration, was meant to save US financial institutions from a systemic collapse. But an analysis of banks’ earnings statements concludes that nearly 100 bailed-out banks are at risk of collapsing all the same.
Despite receiving a total of $4.2 billion in bailout cash, 98 US banks are at risk of failing, the Wall Street Journal reports.
The banks are suffering from “eroding capital levels, a pileup of bad loans and warnings from regulators,” the Journal reports, and the nature of the problem indicates that these banks were in trouble before the 2008 crisis hit — a sign that the US’s regulatory structure for banks may have been insufficient for years or decades before the collapse.
So far, seven bailed-out banks have already collapsed, costing taxpayers $2.7 billion.