Everyone’s going nuts over a sudden influx of “troubled banks” lists. No one wants their money sitting in a bank that’s about to go under, but things might not be exactly what they seem.
It’s not time to put your money in a shoebox under your bed.
At least…not yet.
Here’s the story, from ABC News:
- While the Federal Deposit Insurance Corporation (FDIC) is keeping secret its official list of 90 troubled banks, ABC News has obtained other lists prepared by several research groups and financial analysts.
- The lists use versions of the so-called “Texas ratio” which compare a bank’s assets and reserves to its non-performing loans, based on financial data made public by the FDIC in March.
Analysts say banks with a ratio over 100 per cent would be the most likely to fail, based on what happened to Texas savings and loans during the 1980’s.
Read the full story here.
Officials from the banks on the list are all arguing semantics. They say the formula is flawed and that the lists don’t accurately reflect the condition of their banks. Sure, that could be a lot of bull, but as long as your bank is insured by the FDIC and you haven’t deposited more than $100,000, you’re covered. If those two conditions don’t apply to you and your company is on the list, I’d say it’s tme to panic.
