Friday, May 3, 2013

This Week in Bank Failures

People watching the global economy are paying more attention to central bank policies. This week the ECB followed Japan’s example in aggressive monetary stimulus as it cut its reference interest rate to an all-time low of 0.5 percent. Yesterday, Canada picked a new central banker, and to the surprise of most observers, they chose an economist with strong experience in export financing. Some saw the selection as an attempt by politicians to select a low-key figure who wouldn’t draw the kind of attention that central bankers are currently getting around the world. Unlike many other countries, Canada doesn’t need extraordinary interventions to keep its banks standing, so it also doesn’t need a highwire act from its central bank. Perhaps it is also that the politicians don’t want to share the spotlight, but it makes a certain kind of sense that policy should come primarily from the elected officials themselves, rather than the people they appoint.

The NCUA liquidated one credit union tonight. Lynrocten Federal Credit Union had about 1,000 members, particularly employees of paper packaging manufacturer RockTenn. The NCUA says it will contact the credit union’s members next week with information about their insured deposits.