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More Bank Failures Coming As FDIC Goes Further Into The Red

Published on November 26th, 2009

Only banks with a trading side are doing well while more ‘regular’ banks are in trouble. This means more big banks swallowing the smaller ones. How soon until there are only a handful of monster banks controlling everything?

And oddly, this all isn’t big news.

The government-administered insurance fund that protects depositors fell into the red for the first time since the fallout from the savings-and-loan crisis of the early 1990s as the pace of bank failures accelerated.

The fund had a negative balance of $8.2 billion at the end of the third quarter, federal regulators said Tuesday. Bank customers, however, should remain confident that their deposits would be protected since most of the amount reflects money that Federal Insurance Deposit Corporation has already set aside to cover the losses from future bank failures.

Officials of the F.D.I.C. said in October that the deposit insurance fund had been depleted, but the third-quarter report card on the banking industry issued on Tuesday was the first time that hard numbers had been released. Even amid early signs that the economy is recovering, the report suggested that the country’s 8,100 lenders remain in fragile condition.
[...]
the number of bank failures will probably keep climbing. So far, the F.D.I.C. has seized and sold 124 banks in 2009, and analysts expect hundreds more to collapse in the months ahead. That has put significant pressure on the F.D.I.C. fund, which posted a negative balance for the first time since 1992 when regulators cleaned up the carnage from hundreds of failed thrifts and other commercial lenders.

9 users responded in " More Bank Failures Coming As FDIC Goes Further Into The Red "

# 1 SparkyOne said, on November 26th, 2009 at 7:30 am

Just plain old fucking thieves.

They hold UNEMPLOYMENT checks for 5 weekdays b4 applying to my account. Where is my FDIC, backed by the taxpayer goddamn bailout?
NEVERMIND
Where did I put those 300 7.62 rounds?

# 2 Eric said, on November 26th, 2009 at 8:05 am

Meanwhile, GS tax rate is effectively 1%

# 3 chris said, on November 26th, 2009 at 8:12 am

The banks that fail are the smaller ones. Even if hundreds fail, very likely, it won’t change the big picture of American finance.

Here is a list of the top 50 banks by asset size.

The reality is that the little fish have mostly already been gobbled up.

If you look at AIG or Bear Stearns it is clear that a division can take out the whole company. The big banks need to be forced to divest themselves of their most dangerous products.

# 4 moss said, on November 26th, 2009 at 9:09 am

I would hope the Times writers know better than they admit to in scare articles like this.

FDIC assessments vary according to need. While people are whining about special assessments required to guarantee deposits as a result of years of zero oversight by Congress and play money-politicians – this year – last year and the year before, FDIC assessments on most banks was zero!

The money wasn’t needed. They didn’t ask for any.

# 5 bobbo, trusting my government does the right thing said, on November 26th, 2009 at 11:22 am

I find this hard to believe. Just 2 weeks ago the lady who runs the FDIC said the program was sound and everything was peachy keen.

To think our government is corrupt in every imaginable way would be to – - – - – - – would be to – - – - – well, I guess it would be to think.

# 6 Rick Cain said, on November 26th, 2009 at 6:44 pm

Banks should fail, and fail HARD. Running at 0% interest and they still can’t make money???

Send these people to the unemployment lines! Make big banks pay more FDIC dues than smaller responsible banks.

# 7 Dough Rises said, on November 27th, 2009 at 4:47 am

Oh paleeze, if I hear one more person complain about delays in getting FREE MONEY for not working I will make sure I get to your bank and puke all over their FREE MONEY first before they get it, then hand it to them personally, and puke all over them 5 more times as they keep complaining about everything. Most of these people on unemployment don’t even care about going back to work until it runs out. They go travel the world or at least their own back yards playing games, living leisurely, at taxpayer expense. I’m so sick of this crap. There are some of us US citizens hard working self employed who are in bread lines now with no insurance. Where’s the governments unemployment insurance program for the uninsured? We don’t need universal health care. We need universal unemployment insurance for all so nobody has to ever work.

# 8 Mr. Fusion said, on November 27th, 2009 at 6:40 am

#7, Dough,

Ignorance is bad. Listening to Limbaugh or Beck is dangerous. Blaming others for your own failures is just plain retarded.

Unemployment is an entitlement, the employers must pay for it the same as the employer must also pay for workers compensation.

That you don’t qualify for unemployment is YOUR fault. Although there were many in our county collecting unemployment, I know of none that took a vacation.

# 9 Mr. Fusion said, on November 27th, 2009 at 6:44 am

The FDIC is financed by every insured bank paying a premium on all insured accounts. In recent years the premiums exceeded the amount required and so were turned over to the Treasury. In turn, the FDIC may go to the Treasury to recoup that money and, if required, borrow sufficient more, to meet its needs.

The FDIC will only be withdrawing money it previously deposited. Instead of vilifying the FDIC for doing what they should be doing, why not vilify the government that allowed the crises that made this happen in the first place.

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