“More Georgia Banks Succumb”

Two more Georgia banks failed on Friday!

With the failure of the 72nd and 73rd banks since the banking crisis began Georgia’s banking system remains extremely vulnerable.

Florida lost another bank, the 12th this year and number 52 since the crisis began. Florida remains 2nd to Georgia in bank foreclosures.

A total of 406 U.S. banks have been taken over by the FDIC, and the four lost last week cost the DIF nearly $360 million.

But, the problem brewing in Europe may far exceed our crisis here in the United States.

Greece’s financial problems have brought the solvency of European banks, and what exposure our banks have to those in Europe, into question.

Dexia, A Belgian-French bank, is the first to need a bailout in conjunction with the Greek crisis. Their problems extend to Morgan Stanley and Goldman Sachs the two  U.S. institutions that have the greatest exposure to the troubled bank.

Though this seems to have little impact on the existing U.S. banking crisis which is forcing the FDIC to close smaller banks, the potential contagion of Dexia’s restructuring remains unknown. But, it is obvious it will ripple through the global financial system and possibly the biggest banks in the United States.

The sordid dealings of unfettered and unregulated banks and financial institutions are destroying people’s lives all over the world and could lead to renewed acceleration of our own bank failures.

We’re currently down to 7,513 FDIC insured banks from over 8,100 just 4 years ago, and though some felt that there were too many banks already, there doesn’t seem to be anything in the near future that will end the decline. The losses will continue, reducing the number of banks and eventually cost the taxpayers for the closures.

We should watch closely how our system reacts to the losses in Europe should the dominos begin to fall.

The recession is not over and it would be foolish to return to the excesses that caused the meltdown.

Georgia is definitely through losing banks.

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