Distressed Florida Banks Ask For Break From Capital-Raising
Florida's top banking lobbyist sent a letter to the Federal Deposit Insurance Corp. Chairman Shelia Bair and Federal Reserve Chairman Ben Bernanke, asking that all local banks get a 12-month reprieve from higher capital requirements, loan appraisals and new regulatory sanctions, the Wall Street Journal reported.
"Unless we work together in giving our banks more time to work through this oil crisis," more financial institutions will go under, wrote Florida Bankers Association President Alex Sanchez. "A bank can only be as good as the community it serves."
Thirty Florida banks have failed since 2007, the third-highest total for any state after Georgia and Illinois. Now, with the Gulf oil spill hitting tourism, analysts fear more banks may suffer losses.
In the aftermath of Hurricane Katrina in 2005, banks in Louisiana, Alabama, Mississippi and Texas all got a three-year waiver from loan-appraisal regulations. They did not get a full exemption from capital requirements.