Why Are Banks in Georgia Failing?

Up until recently banks were very considered to be not only dependable but also very stable financial institutions. At the beginning of 2009 banks start failing at an extremely high rate out of all the states it appears that the state of Georgia was hit the hardest. There have been over 25 banks that have shut down in the state of Georgia in 2009. Out of 130 banks that closed nationwide it is very questionable to why there were so many in Georgia.

The year 2009 was a terrible year for banks in Georgia. During this past year banks have gone out of business every other day. Unlike credit unions which are owned by the account holders, banks are owned by big corporations. It not hard to see the logic behind most of the decision making. Many of these banks operated similar to that of mom and pop establishments. Although most residents of Georgia had never heard of some of these banks yet they felt comfortable trusting these banks with their money because they were local. Just because a business is local does not mean that it does not have its share of problems. It just further gives credit to the maxim that business that has a name that is well known most of the time will be more reputable than one that does not. Now there are even the major banks are struggling to keep their heads above the water. Many of these banks did not have enough financial stability to remain operational while others went under as a result of bad loans that were given out. Many of them were some desperate to make profits that they jeopardized the welfare of their customers. Some of the damages resulting from the close of these institutions are close to a billion dollars.

When these banks closed their doors they either joined under the umbrella of larger banks or were taken over by the state. The state of Georgia really was in no position to acquire the debt of these failed banks. Hopefully the year 2010 will prove to be one where we will see a reduction in bank failures in the state Georgia.