Remember To Recycle (The Old Banks)

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What is one supposed to do with all the failed banks? Buy them and create a new, prettier one! Former BofA and Wachovia execs are doing just this and are seeking $1 billion to fund their mega-bank, the Blue Ridge Bank N.A., to be based in Charlotte. And they're hiring!


We're not sure where they intend to raise the cash from, but according to the application obtained by the Charlotte Business Journal, the organizers are "capable of raising $1 billion in cash to launch the bank."

Through indications of interest from investors, the company will have the capacity of up to $1 billion in funding through its initial capital raise," the application states.

Milton Jones Jr., who retired from BofA in September as Georgia market president, would be CEO; Walter Davis, a former Wachovia executive VP, would be vice chairman and chief credit officer; Charles Williams, a former BofA i-banking exec would be COO; Edward Brown, a retired BofA president of investment banking would be lead independent director. Robert Brown, a former Wachovia director would be on the board.
According to the FDIC application, they're currently doing interviews for a chief financial officer.

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Banks Prove That They Are Not Too Big To Fail By Saying "We Can Fail" On A Piece Of Paper, Moving On

One way you could spend this slow week is reading the "living wills" submitted by a bunch of banks telling regulators how to wind them up if they go under. Don't, though: they're about the most boring and least informative things imaginable and I am angry that I read them.* Here for instance is how JPMorgan would wind itself up if left to its own devices**: (1) It would just file for bankruptcy and stiff its non-deposit creditors (at the holding company and then, if necessary, at the bank). (2) If after stiffing its non-deposit creditors it didn't have enough money to pay its depositors it would sell its highly attractive businesses in a competitive sale to willing buyers who would pay top dollar. This seems wrong, no? And not just in the sense of "in my opinion that would be sort of difficult, what with people freaking out about JPMorgan going bankrupt and its highly attractive businesses having landing it in, um, bankruptcy." It's wrong in the sense that it's the opposite of having a plan for dealing with banks being "too big to fail": it's premised on an assumption that the bank is not too big to fail. If JPMorgan runs into trouble that it can't get out of without taxpayer support, it'll just file for bankruptcy like anybody else. Depositors will be repaid (if they're under FDIC limits); non-depositor creditors will be screwed just like they would be on a failure of Second Community Bank of Kenosha.