Social Question

SquirrelEStuff's avatar

How come bank failures always happen on Fridays?

Asked by SquirrelEStuff (9306points) November 1st, 2009

http://www.fdic.gov/bank/individual/failed/banklist.html

Here is a very long list of bank failures. Most have been within the past year. They always happen on Fridays. What is the reason for this? It seems that most people follow the news during the week but not on weekends, which is when these would be reported. Is this just a coincidence?

Observing members: 0 Composing members: 0

6 Answers

JLeslie's avatar

Probably has to do with how the FDIC people handle the transition. Just guessing.

jrpowell's avatar

Nope. It isn’t a coincidence. Politicians love the Friday news push too. Bush was famous for it.

virtualist's avatar

and entire Slate piece on it

“So the government has a full weekend to reopen them under new management. If the banking business didn’t return to normal at the earliest opportunity, the specter of agitated customers might erode public confidence in the banking system, triggering a wider panic. So regulators close banks at the end of the day on Friday to take advantage of the regularly scheduled days off. In that time, officials from the Federal Deposit Insurance Corp.—the agency in charge of supervising the actual takeover—can settle a failed bank’s accounts and carve out assets to liquidate later, thereby easing the transition to a new owner. And if there is no new owner—i.e., if no healthy bank has stepped up to purchase the failed one—then the FDIC can use the weekend to write checks to customers for the total amount of their insured deposits. (The FDIC can also create a temporary bridge bank, as it did last month with IndyMac, to take over the failed bank’s operations.) ”

JLeslie's avatar

Wow, seems I did guess pretty well.

virtualist's avatar

@JLeslie

You know too much! You’re too scary ! <g>

JLeslie's avatar

@virtualist LOL. Lots I don’t know.

Answer this question

Login

or

Join

to answer.
Your answer will be saved while you login or join.

Have a question? Ask Fluther!

What do you know more about?
or
Knowledge Networking @ Fluther