A statewide bank here in Nevada must be getting nervous phone calls from depositors. They issued a "don't worry" letter a few weeks ago and here's some of its contents:
"I know many of you have read the news and may be concerned about the state of the economy and the continued negative press on the banking industry. The news regarding IndyMac's failure has created concern and even panic among customers and investors regarding the soundness of the banking industry as a whole."
They go on to reassure the bank's (and parent company's) decades-long track record of stability with three bullet points, but it's #3 that introduces some fuzzy logic to back up their point.
"3. It's important to remember that the banking industry remains highly capitalized and well prepared for economic weakness. At the end of the first quarter, only 90 banks out of nearly 8,500 were on the FDIC "troubled-bank" list. By comparison, nearly 1,500 banks were on the list in 1990."
That's pretty misleading, because since 1990 there's been a huge amount of consolidation, so the actual number of banks has dropped significantly. As a result, 90 "trouble banks" represents a higher percentage than they indicate, which is more troublesome.
This letter was sent in July, before Nevada National Bank and Silver State Bank had their troubles. Wonder how this Lehman Bros./Merrill Lynch bloodbath with affect things...
"I know many of you have read the news and may be concerned about the state of the economy and the continued negative press on the banking industry. The news regarding IndyMac's failure has created concern and even panic among customers and investors regarding the soundness of the banking industry as a whole."
They go on to reassure the bank's (and parent company's) decades-long track record of stability with three bullet points, but it's #3 that introduces some fuzzy logic to back up their point.
"3. It's important to remember that the banking industry remains highly capitalized and well prepared for economic weakness. At the end of the first quarter, only 90 banks out of nearly 8,500 were on the FDIC "troubled-bank" list. By comparison, nearly 1,500 banks were on the list in 1990."
That's pretty misleading, because since 1990 there's been a huge amount of consolidation, so the actual number of banks has dropped significantly. As a result, 90 "trouble banks" represents a higher percentage than they indicate, which is more troublesome.
This letter was sent in July, before Nevada National Bank and Silver State Bank had their troubles. Wonder how this Lehman Bros./Merrill Lynch bloodbath with affect things...
