I picked this blog to critique because I enjoyed reading about the discrepancies between loans from the fed to large banking corporations and smaller local banks. I found it very interesting that Howard Bank in Baltimore only asked for a thousand dollar loan and still managed to keep from going bankrupt. This intrigued me, as the bank must have used very successful money managing techniques and smart banking tools to use that loan wisely. You also stated in your blog that out of sixty banks that received loans from the fed that sixteen percent of these banks eventually ended up committing bankruptcy. This is an alarming statistic as the fed clearly did not loan money smartly. To have ten out of the sixty banks go bankrupt clearly shows that the corporations receiving loans were not adequately evaluated prior to receiving their loan. The bank in San Diego that received a six million dollar loan is a prime example destructive banking techniques that obviously forced this bank into bankruptcy. The discrepancy of this loan compared to Howard Bank in Baltimore explains how the amount of money that was loaned was able to grow to such a high dollar amount.
Some of the points that I wished were included in your blog were how the fed evaluated which banks would receive loans. This would be an interesting tool to evaluate how successful the fed was in determining which banks would use the government’s money successfully and properly. Another interesting topic of discussion that could have been included was how the size of a loan to be granted was gauged depending on the size of the loan asked. It was interesting that Howard bank only asked for a thousand dollar loan but what if they needed more once the financial crisis turned for the worse? How would the fed determine if another loan would help the bank make a turn for improvement? These two tools of discerning loan significance would be a good measuring stick of how successful the fed was when they determined which banks would receive loans and if their loan size was appropriate. Overall I enjoyed learning about the loans that the Federal Reserve made to various banks across the country. It was an interesting statistic that sixteen percent of the banks that received loans ended up declaring bankruptcy. In the future the fed should take a closer and harder look at which banks will be bailed out and if the loan they receive will help the community these banks are located in.
Jack Dings
