[quote=analyst][quote=evolusd]
However, if these new lax FDIC standards are implemented, banks should be required to disclose the aggregate LTV composition of their CRE portfolio for each property type. At least then investors and depositors can make a sound decision. [/quote]
The whole point of the FDIC is to eliminate the need for depositors to do such analysis. The FDIC is to do the analysis on a proper basis, and to flush out those not in conformance.
Do not underestimate the effect of bank stockholders forcing unsound behavior on their bank managers by comparing them to unsound bank managers making high returns by engaging in inappropriate banking behavior.
With respect to the FDIC, distinct from other entities, this is a black/white issue. The FDIC is failing to do its duty.[/quote]
Where you and I part ways is that you apparently believe all bankers are either competent or incompetent. In my world, there are plenty of competent bankers, plenty of incompetent ones, and a HUGE number in the middle (that complicated gray area we hear so much about). My suggestion is to let those banks run by some of the less-than-middling-but-not-totally-incompetent managers survive, for the good of John Q. Public. It’s only their shareholders that will suffer. But we can agree to disagree here.
I’ve been analyzing banks for almost 15 years. And I’ve rarely found much that’s “black/white” in the world of finance – I see an awful lot of gray. You’ll have to give me directions to the Fantasyland you live in – I’d love to visit sometime. But I agree that the FDIC has failed to do its job properly. Far from it. That, however, is a blinding glimpse of the obvious.
