Further tales of crashing banks and federal intervention:
The 28 branches of 1st National Bank of Nevada and First Heritage Bank [N.A.], operating in Nevada, Arizona and California, were closed Friday by federal regulators.
The banks, owned by Scottsdale, Ariz.-based First National Bank Holding Co., were scheduled to reopen on Monday as Mutual of Omaha Bank branches, the Federal Deposit Insurance Corp. said.
The FDIC said the takeover of the failed banks was the least costly resolution and all depositors—including those with funds in excess of FDIC insurance limits—will switch to Mutual of Omaha with "the full amount of their deposits."
On the larger topic of bubbles and bailouts: I don't have time to find the link right now, but the conservative writer Patrick Deneen—not ordinarily a free-market guy—made a good point a few months back about the notion that some institutions are "too big to fail." On top of the other moral hazards involved, he pointed out, the idea creates an incentive to become…well, too big.
Update: Here's that Deneen link. Thanks to Joe Leibrandt for passing it along.
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