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Bank Failures in Georgia

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Paul Krugman investigates why Georgia, which never experienced a huge housing boom like Florida and other states, has seen an astonishing 37 banks fail. "And for all the concern about banks that are too big to fail, Georgia suffered, if anything, from a proliferation of small banks. Actually, the worst offenders in the lending spree tended to be relatively small start-ups that attracted customers by playing to a specific community," he writes. "So what’s the moral of this story? As I see it, it’s a caution against silver-bullet views of reform, the idea that cracking down on just one thing — in particular, breaking up big banks — will solve our problems. The case of Georgia shows that bad behavior by many small banks can do as much damage as misbehavior by a few financial giants."
SOURCE:   New York Times