Analysis of the Failure of Superior Bank and Trust Essay example -- es

Superior Bank & Trust     The thrift fiscal Institution Superior Bank & Trust is one of the largest. It is located in Chicago and has many branches eighteen of which can be found in the Chicago area. It is owned by one of Chicagos wealthiest families the Pritzkers and Alvin Dworman a well-known real-estate investor from New York. With assets totaling $2.3 billion and deposits of $1.6 billion Superior Bank FSB got caught up in near problems with sub prime loans. This was their main focus. Sub prime lending is lending to people who are poor credit risks. They lend money or make out credit cards at high interest rates. Many companies have prospered using this method only when most have gone under overdue to rising default rates and early prepayments by borrowers who can refinance at lower rates. Superior Bank & Trusts failure was directly associate to sub prime lending.     Regulators were believed to have detected problems as early as January 1999. These regulators should have been the ones to step in and notice that things werent going the way they should have been. preferably Superiors management is bearing the brunt of the blame in this situation. Ellen Seidman states "responsibility for the success or failure of any depository institution rests with its management, directors, and owners." This may be true but if management and financial intermediaries had been performing their tasks properly they would have n...