BankUnited failure will cost billions
TEXT OF STORY
Steve Chiotakis: An already-weakened Federal Deposit Insurance Corporation took another hit when it seized Florida’s BankUnited yesterday. It’s the biggest bank failure of the year, and it won’t be the last. This morning, branches across the sunshine state will welcome customers into a financial institution that looks and sounds and acts every bit as the original bank did. But with new owners. In Miami, here’s Marketplace’s Dan Grech has more.
Dan Grech: BankUnited was Florida’s biggest bank, with $13 billion in assets. Its demise will cost taxpayers nearly $5 billion. That makes it the second most expensive bank failure in this economic crisis after IndyMac.
Real estate expert Jack McCabe says BankUnited specialized in the riskiest types of home mortgage.
Jack McCabe: And that was ultimately their downfall. It was a great profit-maker for them in the early years, but it was an anchor that they couldn’t shed.
BankUnited is the 34th bank to fail this year. That’s compared to 25 all of last year.
Chris Mayer is a professor at Columbia Business School:
Chris Mayer: This is just a sign of what we’re going to continue to see, which is bank failures particularly among small to midsize banks.
BankUnited has been sold to a group of investors. Its 85 branches re-open this morning under the same name.
In Miami, I’m Dan Grech for Marketplace.
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