Federal Deposit Insurance Corporation (FDIC) released a report on U.S. banks earnings that indicates overall profit levels are the highest they have been in four years. While the government may trumpet this as a sign that their interventions and bailouts have succeeded, a broader look says otherwise. Here are some of the figures released:
- The banking industry earned $35 billion in the last quarter, up from $24 billion in last year’s Q3.
- The FDIC currently considers about 11% of U.S. banks as financially problematic, marginally down for the same period last year.
- The very large banks made the bulk of the earnings increase.
- These very large banks accounted for about $30 billion of the industry’s $35 billion in earnings for the third quarter.
The FDIC’s fugues are telling and indicate that the very large banks like Bank of America, Citigroup, JPMorgan Chase and Wells Fargo, the very banks bailed out by the U.S. taxpayers, are now making most of the banking profits. In addition, these banks are not making the profits by lending money in the quantity needed, but rather by taking nearly interest free money from the government and then loaning that money back to the government at a huge profit. Ludicrous.
It has become evident through hindsight that the bailouts of the large banks benefited the banks themselves, not the overall economy. A question remaining is whether the bailouts were the result of mistaken policy or the government’s purposeful attempt to assist fellow elitists in the banking industry.