Berkeley CSUA MOTD:Entry 50539
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2025/07/09 [General] UID:1000 Activity:popular
7/9     

2008/7/11-13 [Finance/Banking] UID:50539 Activity:high
7/11    IMB taken over by FDIC.  Largest single S&L failure.
        \_ Thanks Chuck Schumer for causing a run on the bank!
           "The banking regulator said it closed IndyMac after customers began
           a run on the lender following the June 26 release of a letter by
           Sen. Charles Schumer, D-N.Y., urging several bank regulatory
           agencies that they take steps to prevent IndyMac's collapse.
           "In the 11 days that followed the letter's release, depositors took
           out more than $1.3 billion, regulators said."
           http://news.yahoo.com/s/ap/20080711/ap_on_bi_ge/indymac
           \_ You have a strange way of placing blame.
              \_ Schumer tipped it over the brink. You dispute this?
                 \_ IndyMac was going to die no matter what. You dispute this?
        \_ American Savings and Loan in Stockton was bigger, according to the
           WSJ.
        \- i'd be very surprised if indymac was bigger than continental
           illinois ... factoring in inflation and all that. continental
           illinois was a money center bank in the top 10 by assets. --psb
           \_ Indymac is the #2 largest behind Continental Illinois.
           \_ Not to be pedantic, but wasn't Cont. Ill. a bank, not an S&L?
              \- not to be pendatic in return :-) ...
                 that is a fair point, but since ~1980, the S&L vs (commercial)
                 bank distinctinction is basically trivial, i.e. S&Ls may
                 offer the same range of services and have comparable
                 regulations on investments (and have moved more and more
                 in the covergent direction since like getting rid of the
                 separate FSLIC). YMERA(barfin jake garn-st. germain,
                 DIDMCA, Regulation Q). See e.g. FMISHKIN book on post-New
                 Deal regulation of depository institutions. --psb
                 that is a fair point, but since ~1980, the S&L vs bank
                 distinct is basically trivial.
                 YMERA(garn-st. germain, monetary control act 1980)
                 i.e. S&L may offer the same range of services and have
                 comparable requirements investments. See e.g. MISHKIN book.
                 bank  distinct is basically trivial. YMERA(garn-st. germain,
                 DIDMCA, Regulation Q). i.e. S&L may offer the same range of
                 services and have comparable regulations on investment.
                 See e.g. FMISHKIN book.
                 regulations on investments.
                 YMERA(barfin jake garn-st. germain, DIDMCA, Regulation Q).
                 See e.g. FMISHKIN book on post- New Deal regulation of
                 depository institutions. --psb
        \_ Thanks Bush! Ownership society, indeed!
2025/07/09 [General] UID:1000 Activity:popular
7/9     

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news.yahoo.com/s/ap/20080711/ap_on_bi_ge/indymac
AP Office of Thrift Supervision shuts down IndyMac By ALEX VEIGA, AP Business Writer Fri Jul 11, 7:59 PM ET LOS ANGELES - IndyMac Bank's assets were seized by federal regulators on Friday after the mortgage lender succumbed to the pressures of tighter credit, tumbling home prices and rising foreclosures. a dxq=1189554248 The bank is the largest regulated thrift to fail and the second largest financial institution to close in US history, regulators said. The Office of Thrift Supervision said it transferred IndyMac's operations to the Federal Deposit Insurance Corporation because it did not think the lender could meet its depositors' demands. IndyMac customers with funds in the bank were limited to taking out money via automated teller machines over the weekend, debit card transactions or checks, regulators said. Other bank services, such as online banking and phone banking were scheduled to be made available on Monday. "This institution failed today due to a liquidity crisis," OTS Director John Reich said. A spokesman for the lender did not immediately return an e-mail request for comment. The banking regulator said it closed IndyMac after customers began a run on the lender following the June 26 release of a letter by Sen. Charles Schumer, D-NY, urging several bank regulatory agencies that they take steps to prevent IndyMac's collapse. In a statement Friday, Schumer said IndyMac's failure was due to long-standing practices by the bank, not recent events. "If OTS had done its job as regulator and not let IndyMac's poor and loose lending practices continue, we wouldn't be where we are today," Schumer said. "Instead of pointing false fingers of blame, OTS should start doing its job to prevent future IndyMacs." The FDIC planned to reopen the bank on Monday as IndyMac Federal Bank, FSB. Some 10,000 depositors had funds in excess of the insured limit, for a total of $1 billion in potentially uninsured funds, the FDIC said. Customers with uninsured deposits could begin making appointments to file a claim with the FDIC on Monday. The agency said it would pay unsecured depositors an advance dividend equal to half of the uninsured amount. IndyMac spent the last two weeks trying to reassure customers that it was not near default. On Monday, IndyMac announced it had stopped accepting new loan submissions and planned to slash 3,800 jobs, or more than half of its work force -- the largest employee cuts in company history. In the letter to shareholders, IndyMac Chairman and Chief Executive Michael W Perry said the drastic measures were made in conjunction with banking regulators to improve the company's financial footing and "meet our mutual goal of keeping Indymac safe and sound through this crisis period." The plan was supposed to generate roughly $5 billion to $10 billion per year of new loans backed by government-sponsored mortgage companies, Perry said at the time. But the run on its deposits ultimately short-circuited the strategy, prompting regulators action Friday. The lender, which opened in 1985, closed its run with a string of quarterly losses. The company posted its first annual loss in its history last year, losing more than $614 million as it struggled through the housing slump. The housing outlook was not improving, however, and Perry warned he expected the company's second-quarter loss to be wider than its loss in the first quarter. The information contained in the AP News report may not be published, broadcast, rewritten or redistributed without the prior written authority of The Associated Press.