Banks Gone Wild: Georgia Edition

From the Atlanta Business Chronicle:

Despite Georgia being the epicenter of the nation’s banking crisis, Gov. Sonny Perdue’s proposed state budget would not fund unfilled bank regulator positions that insiders say are desperately needed as the state’s banking woes worsen.

The fiscal year 2011 spending plan released Jan. 15 by the governor’s office would cut $729,265, a reduction of 6 percent, from the department’s fiscal year 2010 budget.

In particular, $276,461 of the cuts at the Georgia Department of Banking and Finance (GDBF) comes from not filling six open positions for bank examiners. Georgia already leads the nation in bank failures and the GDBF regulates more than 250 state-chartered banks with these guys.

9 comments

  1. IndyInjun says:

    And the really bad news is that many of the banks that FDIC has shuttered turned out to have assets at booked that were overvalued from 45 to 145%.

    Just last week a development company defaulted on an apartment complex that left creditors, principally the pension funds of Florida and California holding a 70% loss.

    Losses of the magnitude seen in the first month of this year are of simply shocking magnitude.

    Money spent on revenue auditors and bank examiners who can mitigate $millions in losses is well spent in these kinds of times.

      • IndyInjun says:

        At some point, public retirees have to be concerned about their retirement checks evaporating, given the $10 billion loss in 2 years and that the losses are only recorded when they are undeniable.

        Eliminating mark-to-market accounting was good for politicians, but will turn out to be ruinous for anyone continuing to believe their benefits statements.

        Every $million of loss that can be avoided, mitigated, or eliminated should count for something.

  2. Dave Bearse says:

    Filling vacant positions is a non-starter, when there’s a couple billion to cut from the state budget, and senior state leadership is talking tax cuts.

    Isn’t it Obama’s FDIC that will have to make good on the deposits?

    • John Konop says:

      Dave Bearse,

      The truth is the FDIC raises the insurance cost which is passed on to the banks with is passed on to us. In an indirect way this is like a tax increase with no vote casted if the banks run amok.

  3. achilles says:

    Of course, all the regulators in the world are useless without the political will to back them.

    There’s a big deficit in THAT too.

  4. Making Sense says:

    Politicians without backbones, regulations without enforcement… Typical business in Georgia…

    Charlotte and North Carolina look better every day.

    At this point, heck, Mobile and Alabama are going to be rising again as Georgia falls further and further behind…

  5. B Balz says:

    Y’all need a hug.

    This Atlanta based study shows a positive use for the 150,000 or so ‘PVC Farms” around the metro. PVC Farms is a term used to describe developed land (all infrastructure is built, i.e. sewer, water, underground power, etc. but no structures on the land).

    These PVC Farms are a direct result of lax lending procedures, banking excesses are documented in the following report:

    http://www.redfieldstogreenfields.org/_docs/Red%20Fields%20to%20Green%20Fields%20Atlanta.pdf

    There is money and there is time, we will resolve the current situation and be better off as a result of it. Until the next greed cycle takes over.

    It is the nature of the thing.

    • IndyInjun says:

      Strangely, I agree. It is good that there is capability to build housing stocks of what will be needed by aging boomers as the recently-built huge McMansions are the last thing we need.

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