FDIC Gears Up For A Tough 2010

February 5th, 2010 by narcompany

While it did not end up as costly as the year it followed, 2008 is credited to have produced the biggest failure ever in the United States — that of Washington Mutual which had assets estimated at $307 billion at the time of its closure. Still, 2009 saw the demise of a handful of big banks too, of which one closure is even included in the top 10 largest bank failures in US history.  Of the 140 banks that were taken over by the FDIC last year, 55% or 77 of these were based in only 4 states. Georgia had the highest number with 25 failures, while Illinois closely follows with 21. California and Florida’s closures were also in the double-digit figures with 17 and 14 respectively.  Of the 140 banks that were taken over by the FDIC last year, 77 of these were based in only 4 states; Georgia, Illinois, California, and Florida.

While this is one of the toughest crises to ever hit the banking industry, there is still a positive side to the situation, particularly where customers are concerned. For one, very few uninsured deposits were lost. When a failed bank is acquired by another financial institution, in most cases the acquiring bank assumes practically all deposits from the closed bank including uninsured deposits. Of the 140 closures, the FDIC was unable to find buyers for only 10 of them. Only about $8.4 million were potentially uninsured deposits, which was a very small percentage compared to the more than $7 billion in customers’ deposits at stake.

The FDIC acknowledges that the year ahead will be another taxing one for the industry. In fact, anticipating more bank takeovers, the agency is looking to add 1,600 new staffers, and has drastically increased its operating expense budget for this year to $4.0 billion from about $2.6 billion last year.

“As the FDIC Gears Up for a Tough 2010, Here’s a Look Back at the 2009 Bank Failures”   -January 8, 2010
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