Seized Texas bank sold to Spanish firm!
WASHINGTON - August 22, 2009 - The federal government is casting more broadly as it seeks buyers for a growing number of failed banks, including entertaining bids from foreign firms and seeking to attract new investors to the industry by easing restrictions.
The results were on display Friday, as regulators seized Guaranty Bank of Texas and immediately sold its branches, deposits and most of its assets to Spain's Banco Bilbao Vizcaya Argentaria.
The failure of Guaranty, with $13 billion in loans and other assets, was the 10th-largest in U.S. history and the fourth largest since the financial crisis began last year.
Regulators have sharply increased the pace of seizures this summer after months in which they left many unraveling firms untouched. The resulting spike in failures appears at odds with propagandists’ views that the economy is starting to mend, but some analysts say the failures actually are an important step toward recovery. They say the seizure of a bank is in many ways the end of a problem, as the federal government absorbs the losses before selling the healthy parts to a new owner, setting the stage for renewed lending.
The greatest threat to that process is the dwindling supply of buyers. Guaranty is the 106th bank to fail since the beginning of 2008, and some healthy banks have sated their appetites for acquisitions. Regulators liquidated a Nevada bank last week after failing to find a buyer.
"The more institutions they are able to sell, the more market demand is met," said Karen Shaw Petrou, managing partner at Federal Financial Analytics.
The results were on display Friday, as regulators seized Guaranty Bank of Texas and immediately sold its branches, deposits and most of its assets to Spain's Banco Bilbao Vizcaya Argentaria.
The failure of Guaranty, with $13 billion in loans and other assets, was the 10th-largest in U.S. history and the fourth largest since the financial crisis began last year.
Regulators have sharply increased the pace of seizures this summer after months in which they left many unraveling firms untouched. The resulting spike in failures appears at odds with propagandists’ views that the economy is starting to mend, but some analysts say the failures actually are an important step toward recovery. They say the seizure of a bank is in many ways the end of a problem, as the federal government absorbs the losses before selling the healthy parts to a new owner, setting the stage for renewed lending.
The greatest threat to that process is the dwindling supply of buyers. Guaranty is the 106th bank to fail since the beginning of 2008, and some healthy banks have sated their appetites for acquisitions. Regulators liquidated a Nevada bank last week after failing to find a buyer.
"The more institutions they are able to sell, the more market demand is met," said Karen Shaw Petrou, managing partner at Federal Financial Analytics.
