What Are Zombie Banks?
Banks Having More Liabilities Than Assets Is Never a Good Thing
Zombie banks not only exist but also can impact the rest of the financial system. Below you will find several questions in the Zombie Banking puzzle:
- What Is a Zombie Bank?
- Why Are There Zombie Banks?
- How to Avoid Zombie Banks
- Is the Federal Reserve a Zombie Bank?
Learning More about Zombie Banks
Zombie banks are banking institutions that have more liabilities than assets (negative net worth) and are being kept "alive" by public credit guarantees. The use of "Zombie Bank" as an informal term seems to have originated during the U.S. savings and loan crisis about 25 years ago.
The description became even more accurate and relevant when banks suffered historic losses from derivatives trading and other risky investments in the 2007-2008 time frame. The recent zombie banking problems have primarily involved banks in the United States, but there are increasing reports of similar lending circumstances in Europe.
Should we be worried about zombie banks?
How to Avoid Zombie Banks (Not All Banks Are Zombies!)
There continue to be good banks and bad banks. Finding the good ones and avoiding the bad ones is the challenge for small business owners and individuals alike.
More Observations about Banks
- Thomas Jefferson : "Banking establishments are more dangerous than standing armies."
- David Stockman (President Reagan's Budget Chief) (2012 Interview): "The banks that existed then that were too big to fail are even bigger now. We need not only a reinstitution of Glass-Steagall, but even a more serious limitation on banks."
- One Headline (2012): "Problem Bank List at 20 Year High as Regulators Let Zombie Banks Remain Open"
Featured Zombie Bank Book
The Trillion Dollar Conspiracy by Jim Marrs
A thought-provoking book that will educate readers and increase awareness about financial issues impacting all of us.
The Trillion Dollar Conspiracy by Jim Marrs
A thought-provoking book that will educate readers and increase awareness about financial issues impacting all of us.