Federal Reserve Chief Ben Bernanke told teachers that one third of America's banks failed during the Great Depression. BankUnited CEO John Kanas took that number and projected it into the future. Bloomberg reported:
The U.S. may lose about a third of its banks as the weakening economy weeds out the least healthy institutions, said John Kanas, chief executive officer of BankUnited. “Most of us in the business think we probably need 5,000 and think we are on our way to 5,000 as this cycle, if this is a cycle, unfolds,” Kanas, 63, said today at the Bloomberg Dealmakers Summit in New York.BankUnited's owners, The Carlyle Group, Wilbur Ross, Blackstone Group and Centerbridge Capital, were out in force at the Dealmakers Summit Kanas went on to say:
"It’s not as easy as it once was when the market was going straight up and real estate values were on a straight incline,” Kanas said. “It will require people with greater experience levels and with tougher attitude toward the industry to carve out a future in this business.”
That and $4.9 billion in FDIC loss sharing subsidies. It helps when public institutions recapitalize your bank.
Update: GulfNews reported the FDIC's list of "problem" banks climbed to 829 lenders with $403 billion in assets at the end of the second quarter, a 7 per cent increase from the 775 on the list in the first quarter.
