Pope Francis yesterday dismissed the board of directors of Vatican Bank. The church-owned bank has stubbornly resisted reforms despite a culture of corruption and ties to a series of money laundering and real estate scandals. One of the past directors had already been replaced last year, but with this new change, the bank can hang up its “under new management” sign.
A bankruptcy judge rejected Detroit’s plan to settle swaps with two banks. The swap debts were secured with the city’s future income, but as the judge noted, the intangible collateral is essentially meaningless. Now that the city has given up control of its finances in bankruptcy, it no longer has the authority to assign that future revenue to a creditor, even if a pre-bankruptcy contract requires it. The two banks are essentially unsecured creditors now, a ruling that surprised most observers, but is consistent with the basic tenets of bankruptcy law.
The first bank failure of the new year is DuPage National Bank, based in West Chicago, Illinois, with $60 million in deposits. Republic Bank of Chicago is taking over the deposits and purchasing the assets. It is paying a 1.2 percent premium for the deposits. The return of bids with premiums is a favorable sign for banks — it indicates the expectation of only a small number of bank failures, so that there are more bidders than banks that fail.
It was 11 months since the last Illinois bank failure — another measure of how much bank failures have slowed.