Us Bank Failures

[Jingthing]

It is used to be when the US got a cold, the world got pneumonia.

Well, it now looks like the US has got at least a bad flu.

Do the factors that are leading to bank failures in the US have any impact on Thai banks?

i know alot of us depend on our Thai bank accounts for both living expenses and visa qualifications. Are some Thai banks better riskss than others? I have assumed that SCB, because of its royal connection, is less likely to fail than the others, because it would not be allowed to fail.

[jbaldwin]

I think the in all countries, whether a bank is allowed to fail depends largely on its importance to the financial system in that country.

The reason why a number of US banks have failed is, in part, the fact that there are a lot of small banks that are insignficant to the economy as a whole. The US has about 8,500 and the smallest 7,000 have combined assets that are smaller then Citibank.

In the UK, I beleive that the last bank to fail was London Trust Bank (in about 2001). This has assets of 30 million GBP. Very few people in the UK would have know that London Trust Bank failed (or that it ever existed). Northern Rock had assets of over 100 billion GBP so was 3,000 times the size and so was considered to big to be allowed to fail.

Thailand only has 14 banks so the relative importance of the failure of one bank is much more than in the UK or US. In my view any of the top 6 banks would be bailed out by the government

[Mattchu9999]

It is used to be when the US got a cold, the world got pneumonia.

Well, it now looks like the US has got at least a bad flu.

Do the factors that are leading to bank failures in the US have any impact on Thai banks?

i know alot of us depend on our Thai bank accounts for both living expenses and visa qualifications. Are some Thai banks better riskss than others? I have assumed that SCB, because of its royal connection, is less likely to fail than the others, because it would not be allowed to fail.

While i've never been to los, I would ask do Thai banks have a habit of lending near, at or over the appraised value on real estate to borrowers whom have shakey credit, or no verifiable income providing home loans at interest rates that will adjust to near double the payment ammout in 1 to 3 years?

[jumnien]

It appears certain that the Thai banking system is secure and deposits sound. I've had this confirmed by a fortune teller in a small sub-district of Ratchaburi who has never been wrong on financial affairs in Thailand.

[bri1guy]

Battered mortgage lender IndyMac Bancorp was taken over Friday by the Federal Deposit Insurance Corp. It's the second largest closing of a financial institution in U.S. history.

IndyMac Bank had total assets of $33.01 billion with deposits of $19.06 billion as of March 31. The bank's failure will cost the FDIC insurance fund between $4 billion and $8 billion, according to the regulator.

IndyMac bank, based in California, was the nation's largest publicly traded mortgage lender. The government-run bank will be open for business on Monday as IndyMac Federal Bank.

These Banking Corps can not be compared to Thailand Banking & besides these examples Banking is Sound !!!

[BEENTHEREDONETHAT]

Thai deposits are insured up to 100million baht this year 50million next don't remember what after that, but for the next four years you are covered unless you have over 10,000,000 on deposit on the forth year. Don't guatrantee those numbers but they are close.

[Royale]

It appears certain that the Thai banking system is secure and deposits sound. I've had this confirmed by a fortune teller in a small sub-district of Ratchaburi who has never been wrong on financial affairs in Thailand.

[AFKAFSinLOS]

Financial markets are linked, but economies less so. Thai Banks are generally having a good year...

There's also a fair amount of hypocrisy out there...

I do find it a bit ironic that the US/UK/Europe/IMF etc etc were telling Asians to have free markets and let banks fail in 1997, yet 10 years later when the opposite is in place the answer has changed...

Also if 1997 was the Asian Crisis, why is this being called a "credit crunch" etc. Surely it should be the "farang crisis"... if we're using the same standards .

Back then the Asians bore the brunt. This time round will be the farang... Markets get punished initially regardless. But after a while when the panic dies down people start to differentiate again... The fact that the SET is down more than the Dow this year, is a great example of how markets aren't really being driven by fundamentals at the moment. US has much more problems than Thailand...

On the political front, US has still got months to go choosing their clowns, but Thailand has already done that for the moment... The second government after the coup was always likely to be the important one... god knows which decade they'll finally get someone decent in the US...

[lannarebirth]

More than 500 banks failed in the US in the years 1990-1992. I doubt that had much impact on Thailand.

[chiang mai]

More than 500 banks failed in the US in the years 1990-1992. I doubt that had much impact on Thailand.

You mean S & L's presumably?

[lannarebirth]

More than 500 banks failed in the US in the years 1990-1992. I doubt that had much impact on Thailand.

You mean S & L's presumably?

Including banks and S&Ls the number is well over 1,000 in and around that period.

http://mjperry.blogspot.com/2008/01/histor...k-failures.html

http://www4.fdic.gov/HSOB/HSOBSummaryRpt.a...007&State=1

[AFKAFSinLOS]

More than 500 banks failed in the US in the years 1990-1992. I doubt that had much impact on Thailand.

I'm too young to remember that Uncle Lanna... but would agree with you anyway...

[awakened]

If banks are operating under the fractional reserve banking system (otherwise known as counterfeiting) then any bank can collapse when the public panics and there is a 'run' on the bank.

Some banks, due to some pretty shaky financial funny business, can lend up to $70 for every $1 deposited. If they are required to find cash to return to depositors, they can run out of money fast. The scam works when the International banker pirates who really run the system, refuse to provide liquidity. They first provide cheap money, then when they want to acquire competitors they stop lending and whispers start runs on targetted banks, such as Bear Stearns. They did this very successfully causing the great depression and it could be they are doing it again.

Can this happen in Thailand? Depends how well capitalized they are and whether people panic.

[Rinrada]

Mr Saxena and the Bangkok Bank of Commerce are well forgotten by now methinks.....

...it was about 10 years ago today with a financial crisis on it way and Khun T was in the wings and ready to say.......history possibly repeating its............Mai Chai...sure...

[Pakboong]

Banks that hold a lot of real estate debt have to get hurt. Right now, as much as 50% of the Condo projects are unsold. That number is likely to increase. The Thai banks may be holding some US debt as well. RSB is holding $400 billion. As an example of how a bank across the pond could get themselves involved with this mess.

[Naam]

More than 500 banks failed in the US in the years 1990-1992. I doubt that had much impact on Thailand.

You mean S & L's presumably?

of course he meant S&Ls (which were banks).

[jumnien]

Bank of America stock price up 22% yesterday! Wells up 30%! I would expect a bit of movement in Thai banks today on the SET!

[steveromagnino]

Banks that hold a lot of real estate debt have to get hurt. Right now, as much as 50% of the Condo projects are unsold. That number is likely to increase. The Thai banks may be holding some US debt as well. RSB is holding $400 billion. As an example of how a bank across the pond could get themselves involved with this mess.

You better back that 50% claim up; I think you mean to say 'as much as 50% of units of the condo projects launched this year may still be unsold as at the end of this year according to Acquarius realestate agency who are the agency representing Ideo, a low cost high volume real estate developer that has a business strategy of not running unsold inventory'.

Or are you referring to USA banks with a lot of real estate debt?

Sorry, who is RSB?

[Pakboong]

Banks that hold a lot of real estate debt have to get hurt. Right now, as much as 50% of the Condo projects are unsold. That number is likely to increase. The Thai banks may be holding some US debt as well. RSB is holding $400 billion. As an example of how a bank across the pond could get themselves involved with this mess.

You better back that 50% claim up; I think you mean to say 'as much as 50% of units of the condo projects launched this year may still be unsold as at the end of this year according to Acquarius realestate agency who are the agency representing Ideo, a low cost high volume real estate developer that has a business strategy of not running unsold inventory'.

Or are you referring to USA banks with a lot of real estate debt?

Sorry, who is RSB?

Sorry, a typo I meant RBS

[jumnien]

Bank of America stock price up 22% yesterday! Wells up 30%! I would expect a bit of movement in Thai banks today on the SET!

Bank of America up another 16% today!

[Pakboong]

If you have money in a US bank, you can get an idea as to how safe they are by checking out Bankrate.com. They are pretty good. One of my banks is among the next failures and I am in a spot where I had to use them for my soon to start Social Security deposits. I'm sure that I will have to make a different arrangement but for now I am stuck. They wanted me to send a voided check with my application and since I don't use checks here, I only had an old check from the doomed bank.

[AFKAFSinLOS]

Financial markets are linked, but economies less so. Thai Banks are generally having a good year...

...

Just to add a few numbers to that, now they've been collated for H1. Bangkok Post 22 July 2008: Top six Banks in Thailand reported net profits of THB 44bio, 8 times the profit of same period last year...

Bear in mind that is distorted by a very poor year and losses last year for BAY and TMB, but the overall picture for H1 is rosey for Thai banks in contrast to US banks.