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August 29th, 2009

Could we lose 1,000 banks?



With the recent announcement that the FDIC’s ‘problem bank’ list now is now well over 400, one bank CEO says it could get a lot worse:

The US banking system will lose some 1,000 institutions over the next two years, said John Kanas, whose private equity firm bought BankUnited of Florida in May.

“We’ve already lost 81 this year,” Kanas told CNBC. “The numbers are climbing every day. Many of these institutions nobody’s ever heard of. They’re smaller companies.”

And that, says, Kanas, is because they’re not considered ‘too big to fail.’

“Government money has propped up the very large institutions as a result of the stimulus package,” he said. “There’s really very little lifeline available for the small institutions that are suffering.”

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One Response to “Could we lose 1,000 banks?”

  1. Mitch Says: September 6th, 2009 at 12:03 am

    It’s a strange statement, one I disputed on my blog. It’s just not going to happen; there will be many bank mergers before it got close to anything like that.

    That, plus I just can’t see a 400% to 500% increase over what we’ve had this year coming that fast.

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