Safer Banking Research Articles

It's only a matter of time before the tsunami is coming. It's time to seek higher ground while you still can. As Ben Franklin once wisely noted, "by failing to prepare, you are preparing to fail.

The FDIC recently released its Quarterly Banking Profile, a publication that summarizes the financial performance of all FDIC-insured institutions. In this article, we would like to highlight the key takeaways from the publication, which, in our view, suggest that most U.S. banks are very likely to face major liquidity issues soon.

The Fed is adjusting its bank stress test, but, unfortunately, its new testing standards leave serious holes in determining the true strength of a bank. Let's take a look at the red flags within the Fed's new testing standards.

U.S. Bank has major issues of which depositors should be aware, according to our testing methodology for bank strength.

The latest in our "Is Your Bank Safe?" series, this one focusing on Capital One.

We have developed a testing methodology for bank strength, and Wells Fargo, one of the world's largest banks, has major issues of which depositors should be aware.

We have developed a testing methodology for bank strength, and Goldman Sachs has major issues of which depositors should be aware.

Credit Suisse has major issues of which depositors should be aware, which can also affect weak US banks.

We have just published the latest article in our "Is Your Bank Safe?" series on Seeking Alpha -- this one on Bank of America (BAC), which has major red flags of which depositors should be aware.

In our view, JPMorgan is one of the best U.S. mega banks. It is a well-run institution and its business and overall fundamentals have significantly improved over the past 10 years. However, even this high-quality franchise has quite a lot of red flags, which, in our view, could lead to major issues for depositors in a bear market.

Over the last few months, we have written several articles outlining our views of banks in general. We explained the relationship that you, as a depositor, have with your bank is in line with a debtor/creditor relationship. This places you in a precarious position should the bank encounter financial or liquidity issues. Moreover, we also outlined why reliance on the FDIC may not be wholly advisable. And, finally, we explained that the next time there is a financial melt-down, your deposits may be turned into equity to assist the bank in reorganizing.

You must understand the relationship you have with your bank in order to protect your assets.What is a "bail-in?"How can a "bail-in" affect your rights as a depositor?In my last article regarding the safety of banks today, I tried to explain the legal relationship you have with your bank:"Although you may feel that you have a credit balance in your bank account, pleaserealize that your credit balance is only as safe as the underlying bank's assets. Since a bank's assets are generally the loans it owns, the underlying loans of your bank are actually your problem. In fact, most people do not realize that the bank is not a simple depository agent for money.

It behooves every investor to make sure that their money is in a safe bank, and there are not very many of those in the US.