Number of banks in danger of failure hits highest level since '93

February 24, 2010|By Tribune Newspapers

WASHINGTON — — The number of banks in danger of failing shot up to 702 at the end of last year, the highest level since 1993, as the industry continues to struggle in its recovery from the recession, the Federal Deposit Insurance Corp. said Tuesday.

The number of "problem institutions" - up from 552 at the end of September - comes after 140 banks failed in 2009, a level not seen since the savings and loan crisis in 1990. Not all banks on the problem list fail, and FDIC Chairwoman Sheila Bair noted that the vast majority of the about 8,000 banks with insured deposits are healthy.

"Overall, I think the banking system is challenged but stable," Bair said Tuesday.

Bair said she expected bank failures to peak this year as the industry's recovery lags the overall economy and a wave of commercial real estate foreclosures is anticipated. So far this year, 20 banks have failed. The FDIC has estimated that expected bank failures from 2009 to 2013 will cost it about $100 billion.

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