Mortgage

The true price of bank failures

Estimated cost versus actual cost

According to Crain’s Chicago Business, besides creating the convenient list of failed banks, the Federal Deposit Insurance Corp. also regulates how much it will cost to take over a failing bank. But the estimated cost and actual cost don't always match up. The article features a helpful, comparative infographic, outlining the reality of bank takeover estimates:

Forty-two Chicago-area banks have failed since 2009. When seizing a bank, the Federal Deposit Insurance Corp. estimates how much the failure will cost its insurance fund, which open banks replenish each year and ultimately is backed by taxpayers. But those projections change with time. Losses from some notable local bank failures have mushroomed from original estimates. But the financial blow from others has proven to be much softer than expected.

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