Commerical Credit Unions taken out

From the Wall Street Journal

Federal regulators explained why they took over two commerical credit unions this weekend.

"U.S. Central and Western Corporate have been grappling for more than a year with large paper losses on a slew of assets, mostly mortgage related. In January, regulators moved to prop up U.S. Central with a $1 billion infusion after it took big write-downs on some of the securities.

Mr. Fryzel said regulators acted Friday after becoming convinced that the two institutions were underestimating the true scope of their losses. "With us in control we'd get honest numbers," he said. Mr. Fryzel said regulators plan to replace top management at both institutions"

Does anyone think that the large banking institutions that we have been propping up with billions of dollars are giving accurate estimates of their potential losses and write downs? Why are these institutions taken over and not bailed out? They were along given a 1 billion dollars before being seized by federal regulators. Evidently we would rather have the likes of Citi Group and AIG in business for the long haul.