Federal Reserve Bank of Chicago President Charles Evans on Friday said investors may still expect ailing financial institutions to be bailed out by governments despite reforms aimed at reversing market psychology. Get the full story »
Filed under: Bank failures
U.S. regulators announced the failure of an Illinois bank Friday, the fourth in that state to be shuttered this year. Get the full story »
The Federal Reserve plans to release documents on Thursday identifying financial companies that received Fed loans to survive the financial crisis. Get the full story »
Washington Mutual on Monday won court approval to move to the next stage in its renewed attempt to exit bankruptcy but was told to spell out what effect suspicions of insider trading could have on the $7 billion distribution plan.
Judge Mary Walrath said the company, the former parent of Washington Mutual Bank, or WaMu, can send out its revised plan to creditors for a vote after supplementing it with an analysis of what could happen if there is proof of insider trading. Get the full story »
A U.S. government regulator sued Kerry Killinger and two other Washington Mutual Bank executives accused of pioneering reckless home loans that led to biggest bank failure in U.S. history.
The three “gambled billions of dollars of WaMu’s money” by rewarding employees and themselves for pushing risky, low-teaser rates loans while ignoring warnings about the housing bubble, the Federal Deposit Insurance Corp said in its lawsuit. Get the full story »
The Federal Deposit Insurance Corp. sued three former executives of the failed Washington Mutual Bank, along with two of their wives, in a lawsuit filed on Wednesday.
The FDIC is seeking $900 million in damages, charging gross negligence and other failures by the former executives in the run up to WaMu’s collapse in September 2008, the largest U.S. banking failure. Get the full story »
U.S. banking regulators have paid out nearly $9 billion to cover losses on loans and other assets at 165 failed institutions that were sold to stronger companies during the financial crisis. Get the full story »
During an attempt to rescue South Side lender ShoreBank last year, Federal Deposit Insurance Corp. Chairman Sheila Bair called Wall Street banks soliciting investments in the bank, but a new report by the FDIC’s inspector general concluded the intervention wasn’t inappropriate. The report, released Thursday, also disclosed that the estimated loss to the FDIC’s insurance fund from ShoreBank’s failure has grown substantially since its August failure, standing at $452 million. Get the full story>>
The failure of Chicago-based ShoreBank was blamed Wednesday on poor risk management by its directors and officers, and its losses to the Federal Deposit Insurance Corp. will be worse than originally expected.
Politically connected ShoreBank, which was known for lending in poorer neighborhoods, “failed due to insolvency brought on by the board and management not implementing adequate risk management practices,” according to a report issued Wednesday by the FDIC’s Office of Inspector General. Get the full story »
Regulators have shut down a small bank in Illinois, raising to 23 the number of U.S. bank failures this year after the limping economy and mounting soured loans felled 157 banks in 2010.
The Federal Deposit Insurance Corp. on Friday seized Valley Community Bank, based in St. Charles, Ill. The bank has five branches, $123.8 million in assets and $124.2 million in deposits. Get the full story »
Lehman Brothers and Barclays deceived JPMorgan Chase & Co. with bad assets that the failed investment bank’s own employees dubbed “goat poo,” according to new court papers that escalate a legal battle between the financial firms.
JPMorgan filed new court claims in the case, contending that Lehman left it with $25 billion in unpaid loans secured by undesirable such as those left out of the sale to Barclays. Get the full story »
The first bank failure in Illinois in 2011 came Friday when Community First Bank-Chicago was closed by state banking regulators, the Federal Deposit Insurance Corp. said.
Community First Bank has only one branch, at the intersection of Western Avenue and Howard Street. The FDIC said the branch would reopen Saturday as part of Northbrook Bank and Trust Co.
As of Dec. 31, Community First Bank-Chicago had approximately $51.1 million in total assets and $49.5 million in total deposits, the FDIC said. The regulator estimates that the cost of the failure its insurance fund will be $11.7 million.
William Farrow, 55, remembers trying to scrape together enough money to attend graduate school.
A product of Chicago’s Englewood neighborhood, Farrow had graduated from Augustana College in Rock Island in 1977, but got nowhere in obtaining a student loan from a couple of banks. But when he visited a branch of Northern Trust Corp., the Chicago-based bank lent him $1,500. The son of two teachers was on his way to a master’s in management from Northwestern University in 1979. Get the full story »
The Chicago area was home to three of the nation’s 20 biggest bankruptcies in 2010, a roundup by BankruptcyData.com shows.
Measured by assets owned before filing for bankruptcy, Chicago-based Corus Bankshares Inc., owner of failed Corus Bank, ranked second, with $8.35 billion in pre-petition assets.
Ranked sixth was Rockford-based Amcore Financial Inc., with $3.8 billion in pre-petition assets. Get the full story »
Goldman Sachs, Citigroup and other big U.S. banks repeatedly sought help from the Federal Reserve during the financial crisis, according to data on Wednesday that showed just how precarious their situation was at the time.
Many of the firms now boasting solid profits had to rely on funding from the U.S. central bank, which essentially acted as the glue holding the financial system together in the tumultuous months that followed the bankruptcy of Lehman Brothers in September 2008.
Citigroup, Morgan Stanley and Merrill Lynch, now part of Bank of America, were the three biggest recipients of the Fed’s key emergency lending programs, according to a Reuters analysis of Fed data. Goldman Sachs was sixth on the list, contradicting claims from its top executives that the firm always had plenty of cash on hand. Get the full story »