Regulators Intensify Bank Actions

Federal Regulators have increased the number of struggling banks that they have put on probation in an attempt to force them to fix their problems and avoid failures, according to The Wall Street Journal.

The Federal Reserve and the Office of the Comptroller of the Currency, two of the nation’s primary bank regulators, have issued more memorandums of this nature than they did for the entire year of 2007.

Government officials have brokered the memorandums with institutions of various sizes, ranging from National City, a Cleveland bank with $154 billion in assets to First Private Bank and Trust of Encino California, with $660 million in assets, according to WSJ.

"The increase in [memorandums] is not surprising given the more challenging market conditions faced by many banking organizations," said Roger Cole, the Fed's director of banking supervision and regulation, to WSJ. “They are useful in specifying weaknesses in risk management and other areas that need to be addressed by bank management."

As of June 17, the Fed had entered into 32 memorandums with state-chartered banks and bank holding companies. In 2007, the Fed had 31 agreements total for the entire year.