Giannoulias: Broadway Bank Will Likely Fail

Denies any wrong doing

Wednesday, Mar 3, 2010  |  Updated 1:39 PM CDT
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Alexi Giannoulias came out of the primary bruised. He's got a bank problem on his hands. How will the Broadway snafu affect the wanna-be senator in a year when bank angst runs high?

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Democratic Senate Nominee Alexi Giannoulias blames the tough economy for hurting his family's bank.
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Senate candidate Alexi Giannoulias is afraid his family business, Broadway Bank, will collapse before the general election.

“It’s quite likely that the bank will not be around,” Giannoulias said during an interview with the Sun-Times’ editorial board. “There’s not a lot of capital out there for somebody to find $60, $70 million [as federal and state regulators want the Giannoulias family to reinvest in the bank in the next two months]. I hope I’m wrong.”

Broadway was ordered by the FDIC to raise capital to the tune of close to $75 million to cover losses it sustained from real estate investments.

While Giannoulias is upset about the possibility of his family business failing – “that breaks my heart. ... It was my father’s whole life,” he said – he denies any wrong doing in his role as chief loan officer, when he approved now-scrutinized loans.

“I would vehemently disagree that these are reckless or risky loans,” he said.

“I take my share of responsibility for possibly concentrating too much in commercial real estate,” Giannoulias told the Sun-Times’ editorial board. “Obviously, it’s easy to look back four or five years and say that, but I think in my role, that’s part of what I should be doing. This is not something I’m shying away from. This is not something I’m hiding from. I’m here to answer as many questions as I possibly can.”

The senate candidate said no one could have foreseen the bottom dropping out of the real estate market so precipitously.

But with just a few months until the general election battle vs. Republican Mark Kirk, plenty of people are foreseeing problems for Giannoulias including Kirk.

"I ... worry the possible collapse of Broadway Bank will leave taxpayers to pay for Alexi's reckless loans," Kirk said of his opponent Monday. 
 

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