ShoreBank Is Money Lost For Wall Street
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ShoreBank was seized by U.S. regulators on Friday, after Wall Street failed to rescue the community development bank, while its deposits will be taken over by a newly chartered bank.
The bank known for its philanthropic activities had received investment commitments from Wall Street firms in recent months, including Goldman Sachs Group Inc. (NYSE: GS), Citigroup Inc. (NYSE: C), JPMorgan Chase & Co. (NYSE: JPM) and Bank of America Corp. (NYSE: BAC).
General Electric had also committed to invest funds in ShoreBank recently.
ShoreBank was devastated during the recession when lower-income borrowers were hit hard. The bank was not able to secure funds that it had sought through the Troubled Asset Relief Program to match the pledges it received from the private sector.
FOX Business Network’s Charles Gasparino said, "There is no need for this bank because it is almost certain, even under its current form, to fail. Sources at major firms are telling me they are confident this bank will not survive. They have not technically written off the amount of money they put in, but they all expect that their money is money wasted. Banks that are backing this new ShoreBank believe its money lost."
Gasparino noted that the only reason for the pledges of Wall Street firms to bail out ShoreBank, was the bank's connections to the White House.
"This is a bank that walked arm in arm with the Obama administration and if it wasn't for that, they would not have been bailed out. The Wall Street firms wouldn't have given in to any pressure."
The deposits of ShoreBank will be taken over by Urban Partnership Bank, and David Vitale, the former chairman of ShoreBank will serve as the newly chartered bank's chairman.
The bank known for its philanthropic activities had received investment commitments from Wall Street firms in recent months, including Goldman Sachs Group Inc. (NYSE: GS), Citigroup Inc. (NYSE: C), JPMorgan Chase & Co. (NYSE: JPM) and Bank of America Corp. (NYSE: BAC).
General Electric had also committed to invest funds in ShoreBank recently.
ShoreBank was devastated during the recession when lower-income borrowers were hit hard. The bank was not able to secure funds that it had sought through the Troubled Asset Relief Program to match the pledges it received from the private sector.
FOX Business Network’s Charles Gasparino said, "There is no need for this bank because it is almost certain, even under its current form, to fail. Sources at major firms are telling me they are confident this bank will not survive. They have not technically written off the amount of money they put in, but they all expect that their money is money wasted. Banks that are backing this new ShoreBank believe its money lost."
Gasparino noted that the only reason for the pledges of Wall Street firms to bail out ShoreBank, was the bank's connections to the White House.
"This is a bank that walked arm in arm with the Obama administration and if it wasn't for that, they would not have been bailed out. The Wall Street firms wouldn't have given in to any pressure."
The deposits of ShoreBank will be taken over by Urban Partnership Bank, and David Vitale, the former chairman of ShoreBank will serve as the newly chartered bank's chairman.
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