Dollars & Sense: Bank Failures Send FDIC Into the Red

[marmar]

Bank Failures Send FDIC Into the Red
by Dollars and Sense


There are no green shoots at the FDIC, only red ink. And it's going to get worse before it gets better.

From the http://www.nytimes.com/2009/11/25/business/economy/25fdic.html?_r=1">New York Times:

The government-administered insurance fund that protects depositors fell $8.2 billion into the red for the first time since the fallout from the savings-and-loan crisis of the early 1990s as the pace of bank failures accelerated in the third quarter.

...

Federal Insurance Deposit Corporation officials warned in October that the deposit insurance fund had been depleted, but Tuesday's third-quarter report card on the banking industry marked the first time that hard numbers had been released. Even amid early signs that the economy is recovering, the report suggested that the country's 8,100 lenders remain in fragile condition.

So far in 2009, the FDIC has seized and sold 124 problem banks. Despite booming trading profits posted by some of the larger banks, the bad loan portfolios of zombie banks weigh like a nightmare upon the living.

CNN Money reports that the FDIC has hiked up its list of "problem banks" from 416 to 562 just in the last quarter.

The Wall Street Journal reports that FDIC head Sheila Bair stated

"We do obviously have a lot more banks that will close this year and next," Bair said, adding the failures "will peak next year and then subside."

http://www.dollarsandsense.org/blog/2009/11/bank-failures-send-fdic-into-red.html

[Ilsa]

1. I'm glad I don't own any bank stock anymore. And I'm glad i don't

work for one anymore, either.

[SammyWinstonJack]

2. Oops