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Bank failures Reach 106 For The Year

From a discreet Associated Press:

Bank failures hit 106 for year; many more are weak

By Daniel Wagner, AP Business Writer

WASHINGTON – It’s a big number that only tells part of the story. The number of banks that have failed so far this year topped 100 on Friday — hitting 106 by the end of the day — the most in nearly two decades. But the trouble in the banking system from bad loans and the recession goes even deeper.

Dozens, perhaps hundreds, of other banks remain open even though they are as weak as many that have been shuttered. Regulators are seizing banks slowly and selectively — partly to avoid inciting panic and partly because buyers for bad banks are hard to find.

Going slow buys time. An economic recovery could save some banks that would otherwise go under. But if the recovery is slow and smaller banks’ finances get even worse, it could wind up costing even more.

This year’s 106 bank failures are the most in any year since 181 collapsed in 1992 at the end of the savings-and-loan crisis

When a bank fails, the Federal Deposit Insurance Corp. swoops in, usually on a Friday afternoon. It tries to sell off the bank’s assets to buyers and cover its liabilities, primarily customer deposits. It taps the insurance fund to cover the rest.

Bank failures have cost the FDIC’s fund that insures deposits an estimated $25 billion this year and are expected to cost $100 billion through 2013. To replenish the fund, the agency wants banks to pay in advance $45 billion in premiums that would have been due over the next three years…

The list of banks in trouble is getting longer. At the end of June, the FDIC had flagged 416 as being at risk of failure, up from 305 at the end of March and 252 at the beginning of the year.

Yet the pace of actual bank failures appears to be slowing. The FDIC seized 24 banks in July, 11 in September and 11 in October…

The FDIC’s first priority, spokesman Andrew Gray said, is to maintain public confidence in the banking system. "As evidenced by the stability of insured deposits throughout last year, this mission has been a success," he said…

Once again these are the kind of stories that the Associated Press saves for a sleepy Saturday morning. And with much the same motivation as the FDIC.

Confidence must be maintained.

After all, we have a Democrat in the White House.

This article was posted by Steve on Saturday, October 24th, 2009. Comments are currently closed.

4 Responses to “Bank failures Reach 106 For The Year”

  1. proreason says:

    Thank goodness the boy king and little Timmy saved the country from economic disaster.

  2. MinnesotaRush says:

    “To replenish the fund, the agency wants banks to pay in advance $45 billion in premiums that would have been due over the next three years…”

    That pre-payment program will surely help those “weak” banks.

    And .. it will surely help the FDIC to become flush today (which may be more to what the pre-payment gig is all about – much like the Social Security ponzi scheme).

  3. Liberals Demise says:

    I’ve got a hunch I should use the #106 as my Pick 3 for the lotto today!

  4. wardmama4 says:

    I wonder if this is just another ‘state of emergency’ so that that paragon of ethics and morals – Congress – can just start telling everyone in America how much they can make next year – and pardon me isn’t that one (or more) of those dangerous and anti-American ‘isms’?!?

    I’m not taking the H1N1 shot simply because Barry the MD decides that a 1000 people in US/5000 worldwide is somehow a state of emergency.

    This vapid empty suit is so desperate to pass his Obamacare bill so that he can have his legacy – that he will say or do anything – much like what they are doing to the banking business. The banks screw up, hold back to try to fix things and then Congress steps in and makes the whole damn thing worse. And then the bankers whine and bitch when draconian measures are instituted by the draconian moron they helped get elected are enacted.

    I bet Hitlery is laughing her a** off – she knew how this (Obamacare) was going to go down and she is lovin’ it. And as extra bonus points – she no longer has to be in the US to pretend to still care wtf her disgusting serial sex offending husband is doing.

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