A popular measure of bank risk named after Texas gets plenty of use in Florida, where more than 50 banks insured by the Federal Deposit Insurance Corp. have failed since 2008. Followers of the so-called “Texas Ratio,” for example, might have foreseen the recent collapse of Lydian Private Bank in Palm Beach.
A year ago, Lydian looked like a survivor based on the Texas Ratio, which compares delinquent loans and repossessed real estate to a bank’s capacity to absorb losses. Halfway through 2010, Lydian had a Texas Ratio of 65 percent, below the danger zone of 100 percent or more, which indicates that a bank may be headed for failure.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.
For questions call 1-877-256-2472 or contact us at [email protected]
