Bank Collapse Watch: Two In U.S., One in Latvia
Is it beginning to accelerate again?
WASHINGTON (AP) – Regulators shut down Houston-based Franklin Bank and Security Pacific Bank in Los Angeles on Friday, bringing the number of failures of federally insured banks this year to 19.
The Federal Deposit Insurance Corp. was appointed receiver of Franklin Bank, which had $5.1 billion in assets and $3.7 billion in deposits as of Sept. 30, and of Security Pacific Bank, with $561.1 million in assets and $450.1 million in deposits as of Oct. 17.
The co-founder and chairman of parent Franklin Bank Corp., Lewis Ranieri, is credited with inventing mortgage-backed securities two decades ago, but apparently was unable to save his own company from getting ensnared in the home-loan bust.
The bank’s failure is a bitter irony because it is the mortgage securitization business of which Ranieri is known as a pioneer – the repackaging of home loans as bonds that are sold to investors – that was at the heart of the mortgage and credit crises. Last spring, the audit committee of the company’s board found in an investigation certain weaknesses in accounting, disclosure and other issues relating to residential real estate loans.
Emphasis added by me.
So now we know from whose mind this pile of shit sprang!
And both banks appeared on the list I referenced earlier:
RIGA, Nov 8 (Reuters) – The Latvian government said on Saturday it was taking over the country’s second largest bank as the global financial crisis hit the small Baltic state, where economic growth has also sharply fallen.
It said in a statement it acted to “ensure a stable financial system in Latvia and the work of Parex bank”. Parex is the largest locally-owned bank in a sector where Nordic banks have made inroads in recent years.
Latvia, under the boot of Soviet Russia for decades, is now under the hell heel of the hypercapitalists.