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230:(1991), "The Federal Government intervened, with a huge bail-out—$ 5.5 billion of new capital, $ 8 billion in emergency loans, and, of course, new management." A willing merger partner had been sought for two months but could not be found. Eventually, the board of directors and top management were removed. Bank shareholders were substantially wiped out, although holding-company bondholders were protected. Until the seizure of
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868:
327:. It continued to exist, with the federal government effectively owning 80% of the company's shares and having the right to obtain the remainder (ultimately exercised in 1989) if losses in the rescue exceeded certain thresholds. The federal government gradually returned Continental Bank to private ownership, disposing the remainder of its shares on June 6, 1991.
204:
its $ 135M FOC investment afloat. The FOC crisis, and the extent to which it may have jeopardized
Continental Illinois; the banking system; and the financial markets as a whole, was the subject of a hearing by the Subcommittee on Oversight and Investigations of the House Committee on Energy and Commerce, headed by Rep. John Dingell (D., Mich.), in 1988.
193:
for approving risky loan applications. Lytle was sentenced to three and a half years in a federal prison. The Penn Square failure eventually caused a substantial run on the bank's deposits once it became clear
Continental Illinois was headed for failure. Large depositors withdrew over $ 10 billion of
203:
summarized the practice "...(FOC) were so incompetent... they netted exposure by traders, not realizing that the (sic) trader that goes bust, the trader making money isn't going to write (FOC) a check". Ultimately, this meant that
Continental Illinois had to infuse $ 625M in emergency cash to keep
198:
that many customers could not meet their margin calls, forcing FOC to step in with cash or the underlying securities to settle up. This meant
Continental absorbed massive risks on behalf of FOC customers, in the period leading up to a major stock market crash.
354:
including the remote credit card servicing centers in
Hoffman Estates and Matteson Illinois. After moving the credit card staff out of the Continental facility, the operations were reopened at a new facility and rebranded Chem Credit Services later in 1984.
370:
Part of the bank's required reserves were held in silver dollars, which provided the opportunity to profit from a rise in silver prices. The holdings, estimated to be 1.5 million silver dollars, was sold to a coin dealer to raise money in the early 1980s.
194:
deposits in early May 1984. In addition, the bank was destabilized by massive losses from an options firm it had just acquired, First
Options Chicago (FOC), a leading clearinghouse operation. FOC guaranteed that trades would settle, but found during the
188:
was not properly conducted by John Lytle, an executive in the Mid-Continent
Division of oil lending, and other leading officers of the bank. Lytle later pleaded guilty to a count of defrauding Continental of $ 2.25 million and receiving $ 585,000 in
220:(FDIC) feared a failure could cause widespread financial trouble and instability. To avert this, regulators prevented the loss of virtually all deposit accounts and even bondholders. The FDIC infused $ 4.5 billion to rescue the bank. According to
167:
In 1910, the two banks merged to form the
Continental & Commercial National Bank of Chicago with $ 175 million in deposits – a large bank at the time. In 1932 the name was changed to the Continental Illinois National Bank & Trust Co.
115:
in the United States as measured by deposits, with approximately $ 40 billion in assets. In 1984, Continental
Illinois became the largest ever bank failure in U.S. history, when a run on the bank led to its seizure by the
459:
1128:
249:
in a 1984 Congressional hearing, discussing the FDIC's intervention with
Continental Illinois. The term had previously been used occasionally in the press.
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184:—loans for oil and gas producers and service companies and investors in the Oklahoma and Texas oil and gas boom of the late 1970s and early 1980s.
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545:
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Wall, Larry D.; Peterson, David R. (1990). "The effect of Continental Illinois' failure on the financial performance of other banks".
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Continental Illinois Venture Corporation, an investment subsidiary of the bank, formed a semi-independent private equity firm,
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Continental Illinois can be traced back to two Chicago banks, the Commercial National Bank, founded during the
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business. In 1984 the Town and Country Mastercard, issued by Continental Illinois Bank, assets were sold to
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has a retail branch and hundreds of back-office employees at Continental's former headquarters on South
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In May 1984, Continental Illinois became insolvent due, in part, to bad loans purchased from the failed
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in Chicago. Bank of America operates dozens of retail branches in the Chicago area and purchased
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Division of Research and Statistics (1997). "Continental Illinois and 'Too Big to Fail'".
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128:, which ended up being over seven times larger than the failure of Continental Illinois.
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120:(FDIC). Continental Illinois retained this dubious distinction until the failure of
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Due to Continental Illinois' size, regulators were not willing to let it fail. The
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in 2007 to expand its Chicago business and several lines of corporate and
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in order to broaden the latter's midwestern presence. Successor
1213:
American Security and Trust Company Building (Washington, D.C.)
867:
20:
Continental Illinois National Bank and Trust Company of Chicago
803:
509:
in Porter, Stephen R. & Reiff, Janice L. eds. (2004-05).
460:"Washington Mutual sold to JPMorgan Chase after FDIC seizure"
430:
1098:
741:
Managing the Crisis: The FDIC and RTC Experience, 1980–1994
546:"U.S. PUTS TOGETHER $ 7.5 BILLION IN AID FOR ILLINOIS BANK"
252:
738:"Continental Illinois National Bank and Trust Company".
431:
Dash, Eric; Sorkin, Andrew Ross (September 26, 2008).
164:, and the Continental National Bank, founded in 1883.
507:"Continental Illinois National Bank & Trust Co."
378:
109:
Continental Illinois National Bank and Trust Company
834:
See paragraph "The Continental-Illinois Bank Hoard"
684:
The Prize: The Epic Quest for Oil, Money, and Power
616:"Losses at options unit hurt Continental Illinois?"
597:"Nassim Taleb on Black Monday, Fed, Market Lessons"
234:in 2008, the bailout of Continental Illinois under
227:
The Prize: The Epic Quest for Oil, Money, and Power
781:"If It's Too Big to Fail, Is It Too Big to Exist?"
706:
486:"Feds seize WaMu in nation's largest bank failure"
238:was the largest bank failure in American history.
845:The Comprehensive U.S. Silver Dollar Encyclopedia
1423:
709:History of the Eighties — Lessons for the Future
149:Continental Illinois Bank Building at 231 South
576:Belly Up: The Collapse of the Penn Square Bank
433:"Government Seizes WaMu and Sells Some Assets"
894:
809:Too Big to Fail: The Hazards of Bank Bailouts
1268:Bank of America Corporate Center (Charlotte)
291:. Unsourced material may be challenged and
901:
887:
424:
330:In 1994, Continental Bank was acquired by
1049:Farmers and Merchants Bank of Los Angeles
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311:Learn how and when to remove this message
687:. New York: Simon & Schuster, 1991.
578:by Philip Zweig (New York: Crown, 1985,
483:
140:
566:by Mark Singer (New York: Knopf, 1985,
462:. KING 5 TV. 2008-09-26. Archived from
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562:Some of this is detailed in the books
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253:Emergence from FDIC majority ownership
1198:555 California Street (San Francisco)
1024:Citizens & Southern National Bank
882:
749:Federal Deposit Insurance Corporation
715:Federal Deposit Insurance Corporation
632:"1st Options` Loss Was $ 112 Million"
362:, with backing from Bank of America.
218:Federal Deposit Insurance Corporation
118:Federal Deposit Insurance Corporation
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778:
289:adding citations to reliable sources
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111:was at one time the seventh-largest
1462:Defunct companies based in Illinois
908:
13:
1467:Defunct banks of the United States
1457:Defunct companies based in Chicago
1432:Bank failures in the United States
873:Continental Illinois Bank Building
14:
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1129:Provident Institution for Savings
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832:Professional Coin Grading Service
323:Continental Illinois was renamed
245:" was popularized by Congressman
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16:Former bank in the United States
1059:First Republic Bank Corporation
1004:Benj. Franklin Savings and Loan
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811:. Brookings Institution Press.
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196:market's crash in October 1987
1:
1114:National Westminster Bank USA
1084:Gibraltar Savings Association
653:Journal of Monetary Economics
484:DeSilver, Drew (2008-09-26).
417:
171:
1452:Banks disestablished in 1994
1437:Bank of America legacy banks
1124:North Carolina National Bank
1069:Fourth Financial Corporation
971:Bank of America, Los Angeles
929:Bank of America Private Bank
666:10.1016/0304-3932(90)90032-y
7:
1099:MBNA/Maryland National Bank
525:University of Chicago Press
374:
10:
1485:
1079:Gibraltar Savings and Loan
966:Banc of America Securities
924:Bank of America Home Loans
807:; Feldman, Ron J. (2004).
517:Chicago Historical Society
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63:Insolvency; seized by the
1447:Banks established in 1910
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1217:Bank of America Building
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976:Bank of America NT&SA
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779:Dash, Eric (2009-06-20).
352:Chemical Bank of New York
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91:, Illinois, United States
84:
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51:
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33:
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1343:Hearst Tower (Charlotte)
1177:Western Savings and Loan
1094:Mercury Asset Management
1029:Commercial National Bank
126:financial crisis of 2008
1237:Bank of America Center
512:Encyclopedia of Chicago
1442:Banks based in Chicago
1312:Bank of America Tower
1272:Bank of America Plaza
1104:Michigan National Bank
1074:G. H. Walker & Co.
1044:E. A. Pierce & Co.
1019:Central Bank and Trust
535:. Accessed 2009-10-28.
366:Silver dollar holdings
157:
1157:Standard Federal Bank
1149:Security Pacific Bank
1109:Montgomery Securities
1039:Countrywide Financial
1014:Cassatt & Company
466:on September 26, 2008
201:Nassim Nicholas Taleb
144:
67:, ultimately sold to
1182:White Weld & Co.
1034:Continental Illinois
1009:Boatmen's Bancshares
875:at Wikimedia Commons
747:. Washington, D.C.:
713:. Washington, D.C.:
285:improve this section
38:Bank holding company
1203:701 Brickell Avenue
986:Bank of New England
544:Williams, Winston.
124:in 2008 during the
21:
1139:Robertson Stephens
843:Highfill, John W.
785:The New York Times
640:(October 20, 1987)
621:(October 20, 1987)
619:The New York Times
605:(October 26, 2017)
550:The New York Times
438:The New York Times
402:Banking regulation
348:investment banking
162:American Civil War
158:
100:Financial services
19:
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1208:Albuquerque Plaza
871:Media related to
412:Early skyscrapers
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232:Washington Mutual
155:Chicago, Illinois
122:Washington Mutual
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236:Ronald Reagan
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1353:Museum Tower
1316:Jacksonville
1153:Shawmut Bank
1089:LaSalle Bank
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996:Barnett Bank
844:
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788:. Retrieved
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