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Letter Re: Investigating Your Bank's Level of Derivatives Exposure
Dear James
With all of the talk about derivatives blow-ups, I decided to do some research
on my bank, as I am concerned about the cash that I have in my personal account,
as well as the cash that I use for my business.
I first found this
Treasury Department PDF and down around page 22, it lists the top 25 banks
in the U.S., their assets and
their derivatives exposure. I found that my bank is on the top 25 and has a
fairly high exposure to derivatives, but nothing like the top 5. At that point,
I decided that
I wanted to move my money to a safer bank.
I checked around and found a local community bank here in town, that has one
branch. I went there and met with the vice president to discuss a new account.
When she could not answer all of my questions about derivatives exposure, she
brought the CFO in to meet me. He gave me a copy of page 5A of their UBPR (Uniform
Bank Performance Report), which shows their off balance sheet items and derivatives
analysis. They have absolutely no derivatives.
Later,I found that you
can check this for any bank at the FDIC web site,
by just entering the bank's name and city:
I thought that some of your readers might find this of interest. My only concern
at this point, is that if one or two of the major banks goes under, it could
precipitate a run on all banks, which could also affect my new bank. Well,
that's what gold and silver are for, right? Best Regards - Kurt P.
