A new study says nearly 200 banks are at risk of collapse -- but it's not the catastrophe it sounds like.
"This is not like the S&L crisis, it's not like 2008 where it's systemic across all the banks," said Gulf Coast Bank and Trust President Guy Williams.
Williams says it is really not that many banks -- the FDIC insures more than 4,000 banks nationwide. The study by the Social Science Research network found 186 banks could collapse if half their customers attempted to withdraw all their deposits. Williams says that's a bad idea, no matter how healthy your bank.
"What people forget is the economics of America is the money supply is created when people put deposits in banks and make loans at banks," he explained to WWL's Newell Normand. Taking that money out of circulation would contribute to creating a recession.
"It's going to be a challenge for those banks and some of them will go away," said Williams, "and when they do, it's important to remember: there's not a government bailout."
Williams says those banks investors will bear the brunt, but the bank's customer' deposits are insured.
