23 February 2010

Banks Remain Under Stress; FDIC Deficit Grows

NY Times: List of Troubled Banks at 16-Year Peak, F.D.I.C. Says

After weathering the nation’s worst run of bank failures in nearly two decades, the Federal Insurance Deposit Corporation announced Tuesday that it had added 450 institutions to its list of challenged lenders in 2009 and warned that the industry was likely to remain under stress.

The number of so-called problem banks rose to 702 at the end of 2009, compared to 252 at the beginning of the year. Both the number of troubled institutions and their total assets are at the highest level since 1993, putting enormous strain on the government-administered insurance fund that protects customer deposits.

With banks failing in growing numbers, the F.D.I.C. said its insurance fund fell deeper into the red, ending 2009 with a deficit of $20.9 billion. That position was nearly $38.1 billion weaker than a year earlier. The bulk of that decline reflects funds that the F.D.I.C. is setting aside to cope with future losses.

No comments: