Special Report: Crisis in Banking: Requium for a Heavyweight

The Bank of New England rescue proves a marvel of efficiency but raises a disturbing question: How fair are big bailouts?

Call it a tale of two bank failures. When Boston-based Bank of New England Corp. collapsed last week, federal regulators rushed to bail out the region's fourth largest banking company (assets: $22 billion). To prevent a run on deposits that could spread throughout troubled New England and beyond, Washington even stood behind deposits of more than $100,000, the limit covered by federal insurance. But when the small, black-owned Freedom National Bank (assets: $121 million) failed last November in New York City's Harlem, the Federal Deposit Insurance Corporation saw no risk of a widespread panic and let holders of large deposits suffer...

Want the full story?

Subscribe Now

Subscribe
Subscribe

Get TIME the way you want it

  • One Week Digital Pass — $4.99
  • Monthly Pay-As-You-Go DIGITAL ACCESS$2.99
  • One Year ALL ACCESSJust $30!   Best Deal!
    Print Magazine + Digital Edition + Subscriber-only Content on TIME.com

Learn more about the benefits of being a TIME subscriber

If you are already a subscriber sign up — registration is free!