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.