Since I was the Cash Manager for the largest bank in St. Louis and responsible for all our bank’s accounts with other banks, I often had to stop activities with banks that I didn’t consider sound.
Generally, what happened during this period, the Fed came in after the bank closed on Friday(they would have already found a buyer for the troubled bank). During the weekend, the news reported the acquisition by another bank.
On Monday, the bank opened up with some sort of banner covering the old name and giving the new name. Life went on as usual for the customers.
Our bank was an acquiring bank for many smaller banks and savings and loan associations.
When I had a mortgage, I kept 6 months of payments in a savings account at that bank. The rest of my savings was split between 2 other banks which I did not owe anything to.
Creditors have a tendency to dr. your account when there’s a payment dispute. Hence keeping money out of their clutches is a good thing.
On Monday, the bank opened up with some sort of banner covering the old name and giving the new name. Life went on as usual for the customers***
That is pretty much my memory, although I seem to remember it was FDIC at the desk when the bank opened. How the issues were settled was never broadcast. I cannot say, only what was reported.
Today I heard that the U.S. Federal Reserve is the largest land owner in the world. Apparently all that overnight money that the Fed supplies banks (in the multiple billions daily lately) has resulted in the Fed buying up all the property mortgages from the banks.
I have posted here from time to time what the collateral is for trillions of dollars of national debt: our homes, our jobs, our autos, our children, our retirement, our savings... etc. With this move and the student loan crisis such an eventuality is starting to come in to focus. Who loans trillions of dollars with no hope of recovery?
I hope we haven't borrowed our way into indentured servitude.