Biggest Bank Failure of the Year So Far
Another handful of banks have taken the Friday powder, bringing the total number of 2009 failures to 77. Among the dead was the largest bank to go under this year. The Federal Deposit Insurance Corp. reports that Colonial BancGroup Inc. of Montgomery, Alabama has been liquidated, dying with about $25 billion in assets.
Resistance Is Futile Dept: The remains of Colonial now become part of the Naughty 19, as Winston-Salem, N.C.-based BB&T Corp. takes over its assets, branches and other operations.
To get an impression of relative bank sizes, and to understand why even an FDIC chairwoman so determined to fight the too-big-to-fail trend that she'd drive a tractor into a hail of bullets like Duke Wayne in The Fighting Seabees still has no choice but to participate in this kind of giganticization, chew over this:
Colonial had $25,000,000,000 in assets. At the time of the Stress Test results, the smallest of the Naughty 19, State Street Bank & Trust Co., had about $70,000,000,000. Consider how the TARP saved all banks with officers listed in Burke's Peerage. Remember the thesis that the Troubled Asset Relief Program was all a ruse to avoid embarrassing Citigroup. Citigroup, also at the time of the Stress Test (which it failed), had $1,633,800,000,000. Anpther Stress Test failure, Wells Fargo & Co., had $1,082,300,000,000.
So that means that if there were a just God and these two rotten, bloated banks were allowed to fail, the FDIC would need to dispose of $2,716,100,000,000 in assets. Instead of lining up one BB&T as it did for today's liquidation of Colonial, it would have to line up 109 BB&Ts.
Good thing we're not letting banks get too big to fail anymore.
