Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!tamsun.tamu.edu!mtecv2!americast.com!americast.com!usa-post From: usa-post@AmeriCast.Com Newsgroups: usa-today.banks,americast.usa-today.banks Subject: banks Wed, Aug 26 1992 Message-ID: Date: 26 Aug 92 08:21:15 GMT Organization: American Cybercasting Lines: 123 Approved: usa-post@AmeriCast.com 08-26 0000 DECISIONLINE: Banking & Economy USA TODAY Update Aug. 26, 1992 Source: USA TODAY:Gannett National Information Network BANK CITED FOR UNSAFE PRACTICES: The Federal Reserve Board Tuesday cited Colorado bank Thirty Second Avenue Corp. for unsafe and unsound banking practices. The bank, based in Wheat Ridge, is the parent of Citywide Bank of Applewood and Citywide Bank of Jefferson. The Fed said Thirty Second Avenue had a negative equity position and ordered the company to develop a plan for its subsidiaries. BANK MUST DEVELOP LOAN LOSS PLAN: The Federal Reserve Board Tuesday ordered Thirty Second Avenue Corp. to develop a plan to bolster the loan loss reserves of its subsidiary banks. The Fed also ordered the Wheat Ridge, Colo.-based bank to review the subsidiaries' internal loan review programs and look into "the volume of assets criticized and classified by federal or state examiners." BANK STOCKS BACK OFF: Bank stocks are retreating in the face of the dollar's free fall. Since Friday, an index of 24 big bank stocks tracked by Keefe, Bruyette & Woods has fallen 90 points (4%), to 2114 Tuesday. The index is down 9% from its 2312 peak July 2. Analysts blame this week's bank sell-off largely on the dollar's woes. During the day Tuesday, the dollar hit a post-World War II low vs. Germany's mark. FED CAN'T CUT RATES: The sinking dollar would hurt bank stocks because it may keep the Federal Reserve from pushing short-term interest rates any lower. Banks have feasted the past year on steadily lower short-term rates, cutting the rates they pay savers faster than the rates they charge borrowers and pocketing fat profits. Nw the Fed is trying to stop investors from dumping dollars but can't cut rates. CONSUMER CONFIDENCE FALLS AGAIN: Consumer confidence, a critical sparkplug for the economy, fell again in August. The Conference Board said Tuesday its confidence index slipped to 58 this month, from 61.2 in July. It is the lowest mark since a 56.5 reading in March. A reading below 80 is a sign the economy is in recession or barely growing. Low confidence could turn into a self-fulfilling prophecy. BUSINESS LOAN DEMAND STEADY: Business loan demand has held steady while consumer borrowing has grown since the spring, a Federal Reserve survey says. The survey of 59 domestic and 18 foreign banks found that business loans weren't much changed from the last survey in May, though some large companies are borrowing less. Some good news: Banks are more willing to make loans to individuals now than three months earlier. FLORIDA BANKS SURVIVE: Barnett Banks Inc., First Union Corp. and SouthTrust Corp. said Tuesday that none of the banks sustained major damage from Hurricane Andrew, the strongest storm to hit the area since 1928. Dade County appears hardest hit. Barnett Banks said all offices in Broward County, adjacent to the north, and one in Dade County are open. FRANCE SPLIT ON MAASTRICHT: French voters are almost evenly split over whether the country should ratify the Maastricht treaty for the European monetary union, analysts said Tuesday. A poll conducted by the BVA research organization said 51% oppose ratification of the treaty and 49% support it. A separate poll had opposite results. Both polls surveyed 1,000 people. FMC COMPLETES CREDIT DEAL: FMC Corp. Tuesday announced it has completed a credit agreement with 22 banks for $700 million for five years. It is a non-amortizing revolving credit agreement agented by Morgan Guaranty Trust Company of New York. The agreement will replace the company's existing credit agreement dated June 22, 1987, which had a committed amount of $583 million. TWO-YEAR T-NOTES REACH HIGH: The yields on two-year Treasury notes rose in Tuesday's auction to the highest level since June. The average yield was 4.30 percent, up from 4.29 percent at the last auction on July 28. It was the highest rate since two-year notes averaged 5.11 percent on June 23. The notes will carry a coupon interest rate of 4 1:4% with each $10,000 in face value selling for $9,990.50. DOW UP; GOLD, OIL DOWN: The Dow Jones industrial average climbed 4.05 points to 3232.22 Tuesday. The NASDAQ composite index fell 1.17 points to 554.22. Yields on 30-year Treasury bonds rose to 7.47% from 7.44%. The discount rate on three-month Treasury bills rose to 3.17% from 3.14% Monday. Comex gold lost $1 to $340.60 an ounce. Light sweet crude oil was off 39 cents to $21.15 a barrel on the N.Y. Merc. DOW JONES OPENS ON UPSWING: The Dow Jones average of 30 industrials opens Wednesday at 3232.22 after closing up 4.05 Tuesday. The New York Stock Exchange composite opens at 226.47, up 0.13. The American Stock Exchange market value opens at 379.52, down 1.38. The NASDAQ OTC composite opens at 554.22, down 1.17. DOLLAR OPENS MIXED OVERSEAS: The dollar opens mostly down on Wednesday. It opens at 0.5025 British pounds, up from 0.5023; 4.7725 French francs, down from 4.8225; 1.3988 German marks, down from 1.4040; and 124.66 Japanese yen, down from 124.79. (As of 3 p.m. Tuesday. Source: First American Bank of New York.) 24-HOUR TELEPHONE INFORMATION: USA TODAY Money Hot Line. 95 cents a minute. 1-900-555-5555. Banking & Economy editor: Beth Mann. (1-919-855-3491) Making copies of USA TODAY Update (Copyright, 1992) for further distribution purposes violates federal law. This article is copyright 1992 Gannett News Service. Redistribution to other sites is not permitted except by arrangement with American Cybercasting Corporation. For more information, send-email to usa@AmeriCast.COM