How to Manage Your Money and Avoid Money Worries: IndyMac Bancorp Is An Example

How to Manage Your Money and Avoid Money Worries: IndyMac Bancorp Is An Example

The boom is clearly over for this bank. This large lender's remaining assets were seized by federal regulators last Friday. Since then, customers have been hurried to withdraw their money. That causes some type of anxiety that is spreading through the financial markets. Big banks are under lots of pressure to issue a statement about the soundness of their finances. The situation is also bleak for Fannie Mae and Freddie Mac. The two giant companies are at the center of the nation's mortgage market.

So it is just a question of confidence. Customers of IndyMac have been snaking around the corner waiting for a chance to take their money away. There are clear worries about the financial industry. From the President down to the Senators, everybody is trying to reassure the public that the financial system is sound. There are a lot of rumors about customers taking their money out of many banks. Many observers are saying that this is the next phase of the Bear Stearns fiasco. The small banks or financial institutions will not be lucky to receive help as the giant ones. Regulators and investors are bracing for a small number of banks to fail over the next few months.

A Few Questions and Answers about The Current Financial Chaos

Why did the government seize IndyMac's assets? Following the June 26 release of a letter by Sen. Charles Schumer, D-N.Y, urging regulators to take steps to prevent IndyMac's collapse, many customers began a run on the the lender. In the letter, Schumer said that IndyMac's failure was due to long-standing practices by the bank, not recent events. The bank was heavily involved in originating riskier mortgages than traditional community and regional banks. Despite the bank's efforts to reassure customers that it was not near default, it was seized by feds.