Turns out American Banker's March 10 article on the record number of enforcement actions against banks wasn't the last word on the subject. It included not just formal actions, but informal actions, which are not made public and often go untracked. Still, it "only scratched the surface as to what the data mean," according to feedback from Jeanine Catalano, a special adviser with Promontory Financial Group. "In our in-depth monitoring of regulatory trends at banks, we have learned that more than half of the actions issued in 2009 specifically directed financial institutions to take concrete actions to improve their health."

She continued, "more often than not, these directives required specific actions with respect to capital, management, asset quality, earnings, and/or liquidity. Our study indicates that the percentage of formal actions that required strengthening of management, the board or improving oversight, has climbed from close to 70% in the first quarter of 2008 to over 85% in the last quarter of 2009. And of the formal actions that included specific improvement directives, the percentage that directed an institution to increase capital, usually as a percent of assets, as a dollar amount or in a plan to raise capital, has consistently risen in the past eight quarters from just over 70% in the first quarter of 2008 to approximately 95% in the fourth quarter of 2009."

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