Friday, February 26, 2010

Former FDIC chairman leads investors group to buy banks his own agency closed

 This post is only relevant in regard to the hundreds of locally run banks that have been closed by regulators in recent years, including Bakersfield's San Joaquin Bank, shuttered last October. Without excusing any bank for making risky loans, there's a healthy debate about the cost (to taxpayers and local communities) of rushing to close so many of these community banks. Many, like San Joaquin, were deeply involved in supporting non profits on a very generous level. Now here comes Bloomberg News with an incredible story about how the former chairman of the FDIC, William Isaac, is leading a group of investors to purchase some of the very banks that his former agency is closing. All this is legal of course, but to me it screams of potential conflicts and calls into question a lot of practices. Here's the link to the full story. Be your own judge.

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