A minor run on the largest bank in Latvia last weekend led to Monday worries about a possible worldwide run on the banking system. This set up a stock market rout on Monday, which hit European and Wall Street banks especially hard. The worldwide bank run never materialized, and in retrospect, the withdrawals in Latvia were nothing to worry about. People were not taking out all their money, just an average of $200 each, enough to get by for a few weeks in the event that the bank were to close its doors. That is something everyone who can should do anyway in these troubled times.
A U.S. government shutdown is still a possibility, as Congressional leaders were still looking for a path to a budget agreement as of this writing. Whenever there is a shutdown, bank regulators and deposit insurance continue to function.
There were two small bank closings tonight, each with less than $150 million in deposits.
- Western National Bank, 3 branches, Phoenix, Arizona. An out-of-state bank is taking over the deposits and assets.
- Premier Community Bank of the Emerald Coast, 2 branches, Crestview and Fort Walton Beach, Florida, in the Florida panhandle. A local bank is taking over the deposits and assets.
This is likely the end of bank failures for 2011. There were 92 bank failures for the year, half the pace of the previous two years. The lists of problem banks are not shrinking by much, however, nor is the economy improving enough to predict that the number of bank failures will decrease again next year.