Local Banks Can be Harbors of Safety
Tuesday, August 26th, 2008 by Rick Haynes | 1 CommentIt is no surprise to most Americans that the economy is struggling and pulling down the banking industry into a cyclone of recession. As several financial institutions have failed requiring government seizure and oversight, a pool of local banks has wisely navigated the nasty financial muck and created islands of stability.
Last year, the failing sub-prime market was exposed and quickly deteriorated as more homeowners struggled with bad loans and increasingly depressed real estate values. A massive wave of foreclosures swept through the country and rippled into foreign markets, wreaking havoc around the world. Revenue for financial institutions plummeted due to loan defaults; debt burdens swelled. The weakening global economy, particularly the soaring price of oil and commodities, has only increased the anxiety of taxpayers and investors. This uncertainty has stifled any new revenue the banking industry hopes to raise in the immediate future.
Realizing the private sector’s difficulty in controlling the spiraling damage, the government has taken dramatic action to build confidence and cease the losses.
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