New industry analysis conducted by Invictus Consulting Group, an independent financial risk management and advisory firm, reports that at least 758 lending institutions are at risk of failure over the next two years, primarily due to the weak recovery, which could trigger a new wave of loan defaults. Invictus drew its conclusions after stress testing all FDIC-insured banks, using its proprietary ICAM(TM) (Invictus Capital Assessment Model). From a one to five scale of vulnerability (five being the most vulnerable), 758 banks were rated five.
"While any possibility of a bank failure is serious, what makes this situation even more dire is that the demise of any of these banks would adversely affect their local communities, especially smaller business people and those seeking to buy or improve their homes," said Kamal Mustafa, Chairman and CEO of Invictus. "Compounding the problem is the fact that larger national banks are starting to close down their smaller branches, so these communities will have even fewer lending resources."
For more news and information visit Blumberg Capital Partners.
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