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« The Bullish Case For Silver Appreciation - Arithmetic, Human Nature, Supply & Demand | Main | A Christmas Letter from Congress to Taxpayers »
Wednesday
Dec292010

CHART: Bank Failures at Highest Level Since 1992

Chart reflects 'FDIC problem banks' at the end of Q2.  Update on the December numbers - released today - from the WSJ inside.

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Source - WSJ

WASHINGTON—More banks failed in 2010 than any year since the savings-and-loan crisis ended in 1992, but regulators said Wednesday that they believe failures have passed their peak.

So far this year, the 157 banks that failed had total assets of $92.1 billion compared to 140 bank failures with total assets of $169.7 billion in 2009.

"We believe that the number of failures peaked this year in 2010," said Jim Wigand, acting director of the Federal Deposit Insurance Corp.'s division of resolutions and receiverships.

Mr. Wigand said the banks that failed in 2010 were smaller, with lower asset values than the banks that failed in 2008 and 2009. "In terms of failed bank assets, that number peaked in 2008," he said.

As of Sept. 30, when the FDIC released its last quarterly report, there were 860 banks on the agency's "problem list."

Since 2008, 322 banks have failed with combined assets of $633.7 billion and total cost to the FDIC of $79.5 billion.

The FDIC insures deposits for banks that pay premiums to the agency and uses that money to cover the cost of dealing with troubled banks when they fail. The FDIC asked banks to pay three years of premiums at the beginning of 2010 to help pay for the expected onslaught of failures this year.

The biggest bank to fail this year was Westernbank Puerto Rico. About half of the banks that failed in 2010 were based in four states: California, Florida, Illinois or Georgia.

James Chessen, an economist at the American Bankers Association Economist, said the banks that failed in 2010 were smaller and more reflective of the local communities they served than the banks that failed earlier in the crisis.

"There has been a shift from institutions that failed because they took too great a risk on housing to institutions that fail because they serve local communities that have suffered greatly from the recession," Mr. Chessen said.

The lingering effects of the financial crisis and the increasing capital requirements from regulators could mean more mergers for small banks next year, said Chris Cole, senior vice president of the Independent Community Bankers of America.

"I think you'll see an increase in mergers between community banks because there's still a problem with capital out there," Mr. Cole said.

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Reader Comments (8)

Corporate-bond investors have enjoyed two consecutive years of strong returns. They shouldn't count on three in a row.

In Europe, the sovereign debt crisis looms large. In the U.S., where fiscal spending may prop up growth, the risk is that credit quality will suffer. Credit selection will be key to making money in bonds in 2011.

Corporate debt has been in a sweet spot since the start of 2009. It has offered a boost to yields when compared with government debt, yet has proven a safer home than stocks. ...

http://online.wsj.com/article/SB10001424052970203513204576047711655833824.html
Dec 29, 2010 at 10:33 PM | Registered CommenterDailyBail
China's Christmas Day interest-rate rise was a fresh sign of Beijing's determination to cool inflation, even if it means slower growth in 2011. It also should be a wake-up call for those, such as commodity market bulls, who believe in perpetually high Chinese growth.

Over the next decade, double-digit-percentage Chinese growth is likely to become the exception rather than the norm it has been ...

http://online.wsj.com/article/SB10001424052970203525404576049714162065134.html
Dec 29, 2010 at 10:33 PM | Registered CommenterDailyBail
WASHINGTON—President Barack Obama's budget proposal for fiscal 2012 will be released in mid-February, a little more than a week after its planned release date. The administration is scrambling to assemble what could be a pivotal document following a six-week delay in the confirmation of the White House's new budget director, a senior administration official said Monday.

http://online.wsj.com/article/SB10001424052970203731004576045931795150202.html
Dec 29, 2010 at 10:34 PM | Registered CommenterDailyBail
JUNEAU, Alaska—A federal judge has dismissed a lawsuit by Republican Joe Miller and lifted a stay on certification of Alaska's U.S. Senate race, clearing the way for Sen. Lisa Murkowski to be declared the winner.

http://online.wsj.com/article/SB10001424052970203513204576048263832923524.html
Dec 29, 2010 at 10:35 PM | Registered CommenterDailyBail
Auto Industry Recalled 20 Million Vehicles in 2010

http://online.wsj.com/article/SB10001424052970203525404576050160893515604.html
Dec 29, 2010 at 10:36 PM | Registered CommenterDailyBail
House Appraisals Under Fire

Computerized Models Are Assailed as Inaccurate; There Goes the Credit Line

http://online.wsj.com/article/SB10001424052970204204004576049974087536438.html
Dec 29, 2010 at 10:37 PM | Registered CommenterDailyBail
California Woman Is Latest Charged in Insider Probe

http://online.wsj.com/article/SB10001424052970203525404576049762158741424.html
Dec 29, 2010 at 10:43 PM | Registered CommenterDailyBail
Unofficial Problem Bank list increases to 903 Institutions

http://www.calculatedriskblog.com/2010/11/unofficial-problem-bank-list-increases_19.html
Dec 29, 2010 at 10:44 PM | Registered CommenterDailyBail

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