Foreclosure errors still common at big banks
Two more U.S. banks failed last Friday, bringing the tally to 279 collapsed institutions since Sept. 25, 2008, when Washington Mutual went under in the largest bank failure ever recorded. During that time period, the financial industry’s assets have diminished by 4.5 percent. According to the Wall Street Journal, the effects of the wave of bank failures over the last two years — which Standard & Poor’s says is far from over — will have a lasting effect on credit, customers and the economy. In addition to lost jobs and tightened lending standards, fewer competitors means that the remaining banks have the freedom to offer lower interest rates on savings accounts, further squeezing struggling American consumers. “When we step back and look at this financial disaster 10 years from now, the destruction of capital in our economy as a result of what we’ve endured will be the single greatest lasting impact on recovery and how the economy performs in the future,” said Howard Headlee, president of the Utah Bankers Association. [WSJ]
