Georgia’s bank failures earn state recognition!
Tuesday, May 5th, 2009The AP’s Russ Bynum writes an excellent piece that helps explain why Georgia has found itself at the tippity top of a terrible list — the state with the highest number of bank failures:
Experts say it’s a combination of an antiquated state law that favored a plethora of smaller community banks over multi-branch giants; a population explosion in metro Atlanta that fueled massive suburban real estate development and a crush of new banks formed to cash in on the Atlanta boom shortly before the market tanked.
…
Georgia’s diversity of small banks was an asset when the economy was strong, with consumers benefiting from competitive rates and broader sources of credit, said James Verbrugge, a professor emeritus of finance at the University of Georgia’s Terry College of Business. It became a liability when the bottom fell out of the housing market and smaller banks had less capital to weather the crisis.
The excerpts don’t do the article justice. Give it a read for your daily dose of edumacation.
(Hat tip to Travis Fain)
