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1 In 9 US Banks Is At Risk Of Collapse

From Fortune Magazine:

Problem bank ratio at 23-year high

Posted by Colin Barr
February 23, 2011

Fewer banks, more problems. That’s one take on the state of the banking industry, via the latest review issued by the Federal Deposit Insurance Corp.

The number of banks fell for the 25th straight year in 2010, FDIC data show. The agency’s deposit insurance fund now covers 7,657 banks and thrifts. That’s down 25% from 1999 levels and 58% below the 1985 peak.

At the same time, the number of banks at risk of failure continues to climb. The FDIC says 884 institutions rate dishonorable mention (anonymously, of course) on its problem list. That number has risen for 17 straight quarters to its highest level since 1992, at the tail end of the savings and loan crisis

The number of FDIC-backed banks judged at risk of failure is 11.5% — which is to say 1 bank in 9 is in danger of collapse.

That is the highest level since 1987, when 12.5% of banks — 1 in 8 — were on the problem list. It is also the third highest level since records started being kept in 1980, according to data provided by FDIC stats whiz Ross Waldorp…

In other words, we have fewer banks than we have had for at least 25 years. And of those few remaining banks, more are at risk of failure now than even at the height of the ‘Great Recession,’ which has been officially over for twenty months.

And we wonder why credit is tight and the economy is stalled?

This article was posted by Steve on Thursday, February 24th, 2011. Comments are currently closed.

5 Responses to “1 In 9 US Banks Is At Risk Of Collapse”

  1. Rusty Shackleford says:

    The economy is stalled because of obama’s and other socialists’ intentions to do so. They are of the mind that the time has come where the workers’ paradise must come to fruition and therefore, whether the majority of the nation likes it or not, they will do what they must to control you.

    Republicans, largely are unaware of this, still clinging to the idea that this is merely a difference in politics, not ideology. But the most recent events, from the walkouts in WI and IN as well as the milquetoast response to Libya, have proven to me that the socialists are moments away from violently grabbing as much power as they can. They know now they can only do it underhandedly because of the large number of gun-owners in this nation. They must therefore cleverly and craftily make their moves in incremental steps until they have total power.

    The elections of last year told of the desires of the majority of the nation. But to a rabid socialist, the elections were only a small stumbling block. They are vicious and they are selfish.

  2. proreason says:

    But I thought El Magnifico pulled us back from the brink.

    Maybe he just forgot to mention that the pullback was 1 micrometer.

    • Right of the People says:

      He may have pulled us back but he also has his foot squarely on our butts ready to shove us into the abyss as soon as he can find a way how.

      I love my country but I fear my government.

  3. GetBackJack says:

    Read Jim Marrs’ Trillion Dollar Conspiracy

  4. tranquil.night says:

    According to the FDIC, there were 8430 FDIC-insured commercial banks in the United States as of August 28, 2008 (right before the crisis).

    8430 – 7657: 773

    773/8430: 9.169%

    So not only have we not turned the corner, the pace of the bleed out in all likelihood has increased.

    Couple other points:

    Many of the big banks are zombified wings of Treasury and the Fed now.

    Does this number include corporate financial subsidiaries like the GE banking arm that gets to dip into the QE/QE2 printing press kitty, along with much of the rest of Wall St?

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