Brad Ferris

Where Are the Bank Failures in This Financial Crisis?

I think through this credit cycle many long-term investors will find that reality is balanced somewhere between maximum pessimism and maximum optimism concerning financial institutions. What an investor really has to focus on is individual equity risk and how much reward they anticipate receiving from investing their capital in these names. There are certain opportunities emerging where the market has cast all stocks with the same brush. We’ve seen failures, but none of the magnitude that many are raving about in the streets.

One or two large failures is to be expected from this credit bubble bursting and a greater number of smaller regional institutions who got away from conservative operations will bite the bullet also. The risks are real, but the systemic risks to the system have been handled well enough to ensure viability of the sector and continue operations.