Doom’s Google Alert on |CDARS| had been quiet for many moons, but yesterday the bell on that floating cork suddenly gave a faint ring.
Now Sheila and Chris are certainly a whole lot smarter than anyone here at The Castle, but somewhere out there we can promise you there’s somebody even smarter — and, like Tim did before with ‘sales,’ she will soon turn ‘core’ into a business model that starts returning profits beyond the dreams of avarice.
Lots of people are going to become very, very rich on this one. But as sure as yield moves opposite to price it will ultimately end in tears. Glancing at Scott Reynolds Nelson’s schedule we can assert that this new financial “core meltdown” will occur around 2037. Then a couple of years later some shocked Chinese grownups will decide they never, ever want to see anything like this again and will tee up a secret meeting to reorganize the world’s financial services paradigm. Their cover story? A group tourist trip to take in London’s Hyde Park, closing the circle 😉
Bank Investment Consultant (4/5 ’11): “Redefining Brokered Funds, and What It Means for Community Banks”
Concern persists that brokered funds played a role in scores of recent failures. While brokered deposits are not viewed as inherently flawed, regulators are concerned that banks that rely heavily on such deposits can grow too quickly, do not properly account for their heightened interest rate risks and hurt an institution’s retail franchise in the event of a failure. “Use of brokered deposits rather than core deposits reduces the value of the financial institution, thus FDIC should take measures to discourage the use of brokered deposits and provide every incentive to build core deposits,” Haluk Unal, a University of Maryland business professor, said at the FDIC roundtable.