Report: 98 Bailed-Out Banks May Collapse

Monday, January 10, 2011
Daniel Tencer, Raw Story

The $700-billion bank bailout nicknamed "TARP", 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 98 bailed-out banks are at risk of collapsing all the same.

The Wall Street Journal reports: 98 US banks are at risk of failing despite receiving a total of $4.2 billion in bailout cash.

The banks are suffering from “eroding capital levels, a mountain of bad loans and warnings from federal regulators,” the Journal reports. The nature of the problem indicates that these banks were in deep financial 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.

To date, seven bailed-out banks have already collapsed, at a cost to U.S. taxpayers of $2.7 billion.

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Posted by Editor on 01/10/11 at 12:38 PM • (0) Comments

Tags: tarp, wall street, banks, bush administration,