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241:(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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338:. 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.
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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.
204:
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
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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
209:
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.
365:
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.
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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.
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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
199:
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
231:(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
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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.
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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
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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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195:—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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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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131:(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
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American Security and Trust Company Building (Washington, D.C.)
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Continental Illinois National Bank and Trust Company of Chicago
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in Porter, Stephen R. & Reiff, Janice L. eds. (2004-05).
471:"Washington Mutual sold to JPMorgan Chase after FDIC seizure"
752:
Managing the Crisis: The FDIC and RTC Experience, 1980–1994
557:"U.S. PUTS TOGETHER $ 7.5 BILLION IN AID FOR ILLINOIS BANK"
749:"Continental Illinois National Bank and Trust Company".
442:
Dash, Eric; Sorkin, Andrew Ross (September 26, 2008).
175:, and the Continental National Bank, founded in 1883.
518:"Continental Illinois National Bank & Trust Co."
120:
Continental Illinois National Bank and Trust Company
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967:
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845:
See paragraph "The Continental-Illinois Bank Hoard"
695:
The Prize: The Epic Quest for Oil, Money, and Power
627:"Losses at options unit hurt Continental Illinois?"
608:"Nassim Taleb on Black Monday, Fed, Market Lessons"
245:in 2008, the bailout of Continental Illinois under
238:
The Prize: The Epic Quest for Oil, Money, and Power
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792:"If It's Too Big to Fail, Is It Too Big to Exist?"
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497:"Feds seize WaMu in nation's largest bank failure"
249:was the largest bank failure in American history.
856:The Comprehensive U.S. Silver Dollar Encyclopedia
720:History of the Eighties — Lessons for the Future
160:Continental Illinois Bank Building at 231 South
18:Continental Illinois National Bank and Trust Co.
587:Belly Up: The Collapse of the Penn Square Bank
444:"Government Seizes WaMu and Sells Some Assets"
905:
820:Too Big to Fail: The Hazards of Bank Bailouts
8:
1279:Bank of America Corporate Center (Charlotte)
30:
302:. Unsourced material may be challenged and
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341:In 1994, Continental Bank was acquired by
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1060:Farmers and Merchants Bank of Los Angeles
322:Learn how and when to remove this message
698:. New York: Simon & Schuster, 1991.
589:by Philip Zweig (New York: Crown, 1985,
577:by Mark Singer (New York: Knopf, 1985,
473:. KING 5 TV. 2008-09-26. Archived from
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573:Some of this is detailed in the books
264:Emergence from FDIC majority ownership
1209:555 California Street (San Francisco)
1035:Citizens & Southern National Bank
760:Federal Deposit Insurance Corporation
726:Federal Deposit Insurance Corporation
643:"1st Options` Loss Was $ 112 Million"
373:, with backing from Bank of America.
229:Federal Deposit Insurance Corporation
129:Federal Deposit Insurance Corporation
7:
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300:adding citations to reliable sources
122:was at one time the seventh-largest
1473:Defunct companies based in Illinois
1478:Defunct banks of the United States
1468:Defunct companies based in Chicago
1443:Bank failures in the United States
884:Continental Illinois Bank Building
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1140:Provident Institution for Savings
843:Professional Coin Grading Service
334:Continental Illinois was renamed
256:" was popularized by Congressman
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27:Former bank in the United States
1070:First Republic Bank Corporation
1015:Benj. Franklin Savings and Loan
822:. Brookings Institution Press.
207:market's crash in October 1987
1:
1125:National Westminster Bank USA
1095:Gibraltar Savings Association
664:Journal of Monetary Economics
495:DeSilver, Drew (2008-09-26).
1463:Banks disestablished in 1994
1448:Bank of America legacy banks
1135:North Carolina National Bank
1080:Fourth Financial Corporation
982:Bank of America, Los Angeles
940:Bank of America Private Bank
677:10.1016/0304-3932(90)90032-y
1110:MBNA/Maryland National Bank
536:University of Chicago Press
1494:
1090:Gibraltar Savings and Loan
977:Banc of America Securities
935:Bank of America Home Loans
818:; Feldman, Ron J. (2004).
528:Chicago Historical Society
74:Insolvency; seized by the
1458:Banks established in 1910
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1228:Bank of America Building
987:Bank of America NT&SA
956:
790:Dash, Eric (2009-06-20).
363:Chemical Bank of New York
102:, Illinois, United States
35:
1354:Hearst Tower (Charlotte)
1188:Western Savings and Loan
1105:Mercury Asset Management
1040:Commercial National Bank
137:financial crisis of 2008
1248:Bank of America Center
523:Encyclopedia of Chicago
1453:Banks based in Chicago
1323:Bank of America Tower
1283:Bank of America Plaza
1115:Michigan National Bank
1085:G. H. Walker & Co.
1055:E. A. Pierce & Co.
1030:Central Bank and Trust
546:. Accessed 2009-10-28.
377:Silver dollar holdings
168:
1168:Standard Federal Bank
1160:Security Pacific Bank
1120:Montgomery Securities
1050:Countrywide Financial
1025:Cassatt & Company
477:on September 26, 2008
212:Nassim Nicholas Taleb
155:
78:, ultimately sold to
1193:White Weld & Co.
1045:Continental Illinois
1020:Boatmen's Bancshares
886:at Wikimedia Commons
758:. Washington, D.C.:
724:. Washington, D.C.:
296:improve this section
49:Bank holding company
1214:701 Brickell Avenue
997:Bank of New England
555:Williams, Winston.
135:in 2008 during the
32:
1150:Robertson Stephens
854:Highfill, John W.
796:The New York Times
651:(October 20, 1987)
632:(October 20, 1987)
630:The New York Times
616:(October 26, 2017)
561:The New York Times
449:The New York Times
413:Banking regulation
359:investment banking
173:American Civil War
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111:Financial services
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1219:Albuquerque Plaza
882:Media related to
423:Early skyscrapers
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243:Washington Mutual
166:Chicago, Illinois
133:Washington Mutual
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1364:Museum Tower
1327:Jacksonville
1164:Shawmut Bank
1100:LaSalle Bank
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1007:Barnett Bank
855:
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799:. Retrieved
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774:the original
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