FDIC’s new approach – make believe banks. This week’s FDIC approach to bailing out with no money is to create a temporary bank to hold the insured deposits and then permit another bank to operate the branches of the failed bank in order to keep the ATMs working, etc while the customers withdraw their money. The bank doing this (Zion bank) is taking none of the loan portfolio and assuming none of the risk.
Once the failed banks accounts are closed, the branches will close on Feb 12th. One would assume that Zion will get a big portion of those customers for their trouble.
Barnes bank was the failed bank, and had assets of over $800 million. The FDIC’s guess is this will cost about $250 million. This bank had lost close to 50% of its assets value… And the recovery rolls on…
