Thursday, July 29, 2010
103 U.S. Banks Have Collapsed So Far In 2010; FDIC Has $20.7 billion dollar deficit
Almost all U.S. bank closings are now announced over the weekend; effectively keeping the increasing number of bank closures out of the news cycle. The Obama administration continues to use phrases like "green shoots" and "economic recovery", is the U.S. banking system is in the middle of a meltdown? Last Friday, federal regulators shut down 7 more banks. That means that the total number of U.S. bank failures has reached 103 for 2010 so far. Last year (which was a really bad year for bank closings), we did not break 100 until October. Of course federal officials promise that "the worst is almost over", but can we really trust anything that they tell us at this point?
When it comes to the health of the U.S. banking system, the statistical trends certainly do not look promising.
At the end of 2008, there were 252 U.S. banks on the FDIC's problem list.
At the end of 2009, there were 702 U.S. banks on the FDIC's problem list.
About halfway through 2010, FDIC Chairman Sheila Bair said that 775 banks (approximately 10% of all U.S. banks) were on the problem list.