Los Angeles based bank seized by U.S. Financial regulators

Security Pacific bank of Los Angles has become the nineteenth victim of the U.S. financial banking crisis. The story is familiar. Déjà vu. Bad mortgages all over again have paralyzed the southern California bank to the fringes of catastrophic collapse. Crippled by bad loans to Inland Empire (Southern California) developers and home builders, Security Pacific Bank of West Los Angeles was shut down Friday by the Federal Deposit Insurance Corporation (FDIC) and financial regulators, who said L.A.-based Pacific Western Bank would take over its four branches.[1]

Pacific Western Bank has now agreed to assume all the responsibility for the banks $450 million in deposits and purchase approximately $52 million of the banks assets. Is it a good time for other banks to assume responsibility for another banks bad debt? We have almost become de-synthesized hearing this news everyday. It has become the norm and more and more people, everyday, are losing faith and confidence in America’s bankers nationwide.

All branches of Security Pacific Bank will soon reopen, on Monday the 24th of November, 2008 with no disruption of services. Over the weekend, however, depositors of Security Pacific Bank can access their funds by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed as normal. Loan customers should continue to make their monthly payments as usual.[2]

Fear and uncertainty have gripped the financial markets and banks in this world crisis and the psychological impact has become such a heavy burden, almost very infectious.

Canary Wharf’s value plummets

The value of development at the Docklands, Canary Wharf has fallen dramatically fallen by 40% in light of the credit crisis and hardly hit tenants such as the Lehman Brothers, Citigroup and other major leaseholders. British Land Co. Plc, London's prevalent office landlord, cut the value of its venture in Canary Wharf by 40 percent as the credit disaster trapped tenants there including the infamous Lehman Brothers.

The U.K.'s second biggest real estate investment trust owns an 11 percent interest in Canary Wharf through its stake in Songbird Estates Plc. British Land said the value of that stake as of Sept. 30 was 112 million pounds ($168 million), according to a statement yesterday. Shares of both companies have fallen today, November 20th, 2008.[1]

However, the news is not all that bad for Canary Wharf, as JP Morgan has just become Canary Wharf’s largest tenant. The US banking giants have conserved the deal on a £247m land acquired to build their own 1.9m square foot organization space development in London’s Docklands. JP Morgan has signed a 999-year lease for Canary Wharf’s Riverside South site, which will be home to the company’s new European Head office.

[2]

This great deal will boost canary wharf and in real terms save it from becoming a ghost town. It will provide a real boost to the UK commercial property market as concerns grow that the financial crisis will cause financial services group to downsize their business space in London as profits plunge and jobs are axed.[3]

Downey Savings fails

The Federal Deposit Insurance Corporation (FDIC) in the United States is said to have seized three banks including Downey Saving of Minneapolis, U.S. It is the third largest bank to fail this year due to the financial crisis. Allowing borrowers to borrow more money than they can afford to pay back is the culprit. Borrowers are unable to pay back there mortgages and credit card debts, leaving the bank in complete disarray.

The company was sold of to U.S. Bancorp after losing over £675 billion on mortgages in just over a year. The move by federal regulators aimed at having U.S. Bancorp re-modifying over bad 30,000 mortgages. Downey Savings was the 10th largest bank in Silicon Valley, with 13 branches and $1.26 billion in deposits.[1]

Its stock has lost over 99% of their value. But during this crisis there will be many losers and the stocks of all banks have gone down in this sharp economic downturn. It seems no one is shielded from the credit crunch and the list of failures just gets bigger and longer. Everyday there is more and more news of corporations on the brink of collapse.

Up to 22 banks have collapsed just this year in the United States alone. The decomposing real estate market has dampened bank balance sheets drastically. There are no signs of improvement and look like it will be getting worse than better in the short run. It is time for these banks to ‘grow up’, time to buckle up and assume responsibility.

Fortis fighting for survival

Worth £10billion of banking and insurance assets Fortis, a partner of Royal Bank of Scotland in last year's £50billion takeover of ABN Amro last year, fights for its survival.

Jean Paul Votron, Sir Fred Goodwin.

After seeing its share hit a historic low last sunday, the belgo-dutch company faced bancruptcy. Yet another Giant financial institution was about to fall.

First consequence was the highly mediatise departure of its director Maurice lippens.
The company was then facing a bailout, before the dutch, belgian and luxemburgish decided to operate a nationalisation of the firm, by investing into it.
The share is now stabalised at 5.35 euros, but the company is not saved yet, and it already caused large accident, in the belgian economy