The Texas what? A skeptical look behind the most troubled banks list


I originally started writing this post with the intention of reporting on a top ten list of "most troubled banks." A group called Research Associates of America prepared this list, using a variation of something known as the "Texas ratio" to analyze the banks. And media outlets like ABC News have run with this list, splashing it on their website with a dire-sounding headline.

Sounds good, right? Makes for nifty headlines for the media. Helps warn consumers. But as soon as I started reading, I had to ask myself... The what list? Prepared by whom? Using what data?

I started looking around and found that the organization that put out this list of "troubled banks" is the FAST-RAA, a non-profit labor research organization that has strong ties to labor unions. What expertise does this organization have in the banking industry? Why has the media accepted its numbers and reported on the group without any apparent investigation? What is the organization's interest in providing negative information on banks?