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Subject:  Re: Countdown to the next financial bomb Date:  10/8/2012  12:11 PM
Author:  steve203 Number:  405547 of 535073

we never had a major banking failure in the US.

Individual bank failures have always been part of the landscape.

Continental Illinois

The Continental Illinois National Bank and Trust Company was at one time the seventh-largest bank in the United States as measured by deposits with approximately $40 billion in assets. In 1984, Continental Illinois became the largest ever bank failure in U.S. history, when a run on the bank led to its seizure by the Federal Deposit Insurance Corporation (FDIC). Continental Illinois retained this dubious distinction until the failure of Washington Mutual in 2008 during the financial crisis of 2008, which ended up being over seven times larger than the failure of Continental Illinois.
In May 1984, Continental Illinois became insolvent due, in part, to bad loans purchased from the failed Penn Square Bank N.A. of Oklahoma—loans for oil & gas producers and service companies and investors in the Oklahoma and Texas oil & gas boom of the late 1970s and early 1980s. Due diligence was not properly conducted by John Lytle, an executive in charge of oil lending...Lytle was sentenced to three and a half years in a federal prison.

The difference between then and now is that, then, irresponsible and corrupt bank honchos went to the slammer, now they get taxpayer funded handouts.

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