Will Your Bank Fail?

05 Aug Will Your Bank Fail?

New York University Professor Nouriel Roubini claims that the United States is in a recession that will last for at least 18 months and help kill off hundreds of banks. Left in the wake of this calamity will be a $1-$2 trillion price tag for taxpayers.

Mounting losses as a result of the housing bust and spiraling consumer-credit losses, as well as home equity loans that have no value, will cause this all to occur.

As for the banks that will go bankrupt, they will include community banks that
finance homes, stores, downtown areas, commercial real estate and other
mainstays of U.S. towns and cities, Roubini said.

Of three dozen or so medium-sized regional banks, a good third are in distress,” he told Barron’s, saying half of the group could go bankrupt. Some big banks could wind up insolvent, he added, but said they might be deemed too big to fail.

So will YOUR bank be the next to fail? It’s difficult for the American consumer to be able to tell whether their bank will go down the tubes, but it’s important to remember the words of the late Douglas Adams – don’t panic. Your deposits are insured up to $100,000 by the FDIC. So even if your bank goes belly up, chances are good that you will still walk away with your money.

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Jay S. Fleischman is a bankruptcy lawyer with offices in Los Angeles and New York. He can often be found on Google+ and Twitter, where he shares information about consumer protection issues and personal finance.
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