Wednesday Mar 30, 201105:28 PM GMT
Troubled US banks nearing 1,000
Wed Mar 30, 2011 5:29PM
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According to Calculated Risk, the number of banks in the U.S. that are in danger of failing hit 985 last week, the highest level since the beginning of the financial crisis. That's up from 935 at the beginning of the year, just three months ago.


When Calculated Risk began compiling its list of troubled banks back in mid-2009, the number of banks in trouble in the U.S. was just under 400. In a little less than two years, nearly 600 additional banks have slipped into the danger zone. And that number appears to be getting bigger.




The Unofficial Problem Bank List continued to climb as the Federal Deposit Insurance Corporation (FDIC), released its actions for February 2011. With the passage of another quarter, it is time to update the transition matrix.


The Unofficial Problem Bank List debuted on August 7, 2009 with 389 institutions with assets of $276.3 billion. Over the past 19 months, 176 institutions have been removed from the original list with 120 due to failure, 40 due to action termination, and 16 due to unassisted merger. Almost 31 percent of the 389 institutions on the original list have failed, which is substantially higher than the 12 percent figure usually cited by the media as the failure rate for institutions on the FDIC Problem Bank List. Failed bank assets have totaled $166.6 billion or 60 percent of the $276.3 billion on the original list.


The number of problem banks, as listed by the FDIC, had been rising in the third quarter of 2010. The number went from 829 at the end of the second quarter to 860 in the third quarter. Forty-one banks failed in the third quarter, an average of about 3.2 banks per week. A total of 149 banks were closed through the first three quarters of 2010, an average of 3.8 per week.




John Kanas, whose private equity firm bought BankUnited of Florida predicted in 2009 that the U.S. banking system will lose some 1,000 institutions by 2011.


According to the Federal Deposit Insurance Corporation (FDIC), nearly 340 banks have been seized by the government since 2008. As of Feb. 8, the total number of bank failures in 2011 has been 16, compared to 157 in 2010, 140 in 2009, 25 in 2008 and just 3 in 2007.


More than 10 percent of America's 7,760 banks are still in financial trouble.


Nearly 100 banks in shaky condition got more than $4.2 billion in infusions from the Treasury Department under the Troubled Asset Relief Program (TARP).


Many economists believe the U.S. bailout plan will stoke inflation and make it more difficult to get out of the economic crisis. Curiouscapitalists.blogs



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