It’s not surprising. AJC staffer Paul Donsky reports that the current wave of Georgia bank failures is proving much more costly than the Savings & Loan crisis of the late 1980s and early 1990s.
Back then, he writes, the average failure cost the Federal Deposit Insurance Fund about 10 percent of an institution’s total assets. The figure now: 32 percent.
A similar trend is taking place nationwide, putting a severe strain on the FDIC’s dwindling insurance fund, Donsky reports.
Why the huge jump in the cost of failures?
Experts say today’s problem banks are less diversified, took more risks and are dealing with a worse economy compared with financial institutions a generation ago.
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