A few weeks ago, a writer from The Atlanta-Journal Constitution interviewed me to obtain some background information on the current crisis in the banking industry. The article, entitled "Several Georgia banks in jeopardy" was published on October 19, 2008.
According to The Atlanta Journal-Constitution, twenty-five percent of Georgia's banks are facing dangerously high loan delinquency rates. Further, the statewide delinquency rate as of June, 2008 has increased six times over since June, 2006-amassing a total of $6.6 billion of past-due debt. The rise is primarily linked to the turn-down in housing, an industry that had formerly been a mainstay of the state's economy.
Even as default rates skyrocket, experts acknowledge that high delinquencies alone won't necessarily cause a bank to fail. Another determining factor is insufficient reserves. The FDIC and the Federal Reserve Bank have been actively consulting with several Georgia banks to address reserve levels, lending practices and the management of non-performing loans.
Click here (http://www.ajc.com/business/content/business/stories/2008/10/19/georgia_banks.html) to read the full text of the article.