Photo: Wikimedia Commons
A couple of years ago, I spent some time brainstorming with officials from America’s mighty Federal Deposit Insurance Corporation. It felt rather like meeting doctors from ER, or an emergency medical ward. For FDIC officials have handled so many sick American banks in recent years, they have developed a slick drill: if a bank is deemed bust, FDIC “shock troops” will arrive, typically on Friday night, seize control, reassure staff and depositors – before either closing the banks or selling it on.Performing this operation demands tricks of the trade; FDIC officials have learnt from bitter experience that electricity bills need to be prepaid to avoid panic if the lights go off. But the drill is usually slick enough to avoid alarm. So much so, in fact, that many people do not even know that 445 ailing banks have been closed in America since 2008 (or an average of two a week). And while many are tiddlers, the deceased banks include big(ish) groups such as Washington Mutual.
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