Feb 25, 2009

Financial Forum - Is Your Bank Stressed?

The Treasury promises to examine ailing lenders and then decide what to do. You are wondering whether your bank will survive, or go into stewardship.

Time Magazine performed an assessment (outside of the Government promised Stress Test), and here results for four of the biggest are grim.

The assessment is based on the fact that banks should show at least a 5% leverage ratio between equity and assets to be considered healthy. The big four are currently considered healthy, but based on projected losses in the current environment, JP Morgan Chase is the only truly healthy of the bunch (based on 13% overall loan loss projection). Here is the breakdown:

Citigroup 2010 Projection - 3.8%

JPMorganChase 2010 Projection - 6.4%

Bank of America 2010 Projection - 4.6%

Wells Fargo 2010 Projection - 3.7%


  1. This is not good ... I think that a collapse of the US banking system would spell doom for the 'middle class' for at least the rest of this century.

    The gap between the top 5% and the rest of America is too wide to be bridged. Banks having reason to keep money out of the hands of people who can build businesses that will help people become wealthy.

  2. Very disturbing. We are far from done with this mess.

  3. I bought lots of gold way back & just sold it. Hey, I told people to buy gold & only a couple(one sent me a thank you card recently!) did so....but yes, it IS very disturbing.~Mary

  4. The scary thing is, we were lied to so many times over the last few years, how much faith can we put in these institutions going forward?

    Such a shame. This came about purely due to greed. Not bad business decisions, not poor judgment...pure unadulterated greed. Sickening.

  5. Hi Ken,
    How depressing. Makes me want to stuff my life savings in a mattress.

  6. I think I'll go grocery shopping.... in the woods!! Ugh...


  7. These are some scary times. I have Bank of America stock....crash, bam, boom...not worth selling now. :(


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