America's year of bank failures
More banks failed in the United States this year than in any year since 1992, during the savings-and-loan crisis, according to the Federal Deposit Insurance Corp.world Updated: Dec 30, 2010 00:22 IST
More banks failed in the United States this year than in any year since 1992, during the savings-and-loan crisis, according to the Federal Deposit Insurance Corp.
Amid high unemployment, a struggling economy, and a still devastated real estate market, the nation is closing out the year with 157 bank failures, up from 140 in 2009. As recently as 2006, before the bubble burst, there were none.
The FDIC's list of "problem" banks - those whose weaknesses "threaten their continued financial viability" - stood at 860 as of September 30, the highest since 1993.
Bank failures have left the FDIC insurance fund in the red, but the agency predicts that it will have more than enough money to meet the anticipated cost of failures through 2014.
Altogether, banks that failed in 2010 had assets of $92.1 billion, down 45.7% from $169.7 billion for banks that failed in 2009.
On average, the banks that failed this year were much smaller than the banks that failed last year.
"These are very small institutions," Townsend said. "The total asset that they represent is insignificant compared to the financial system as a whole. It's quite manageable."
Ordinarily, failed banks continue to operate virtually seamlessly.
(In exclusive partnership with The Washington Post)
First Published: Dec 30, 2010 00:20 IST