Thanks, Obama! Bank Failures Continue In Spite of Billions in Taxpayer Money; 860 More Banks on “Troubled” List!

Regulators on Friday shut down three small banks in Georgia and Illinois, bringing to 14 the number of bank failures in the first month of 2011 following last year’s tally of 157 amid the sagging economy and mounting bad loans.

The failure of American Trust Bank is expected to cost the deposit insurance fund $71.5 million. The failure of North Georgia Bank is expected to cost $35.2 million; that of Northbrook Bank and Trust, $11.7 million.

 

The 157 bank closures nationwide last year topped the 140 shuttered in 2009. It was the most in a year since the savings-and-loan crisis two decades ago.

 

The 2009 failures cost the insurance fund about $36 billion. The failures last year cost around $21 billion, a lower price tag because the banks that failed in 2010 were on average smaller. Twenty-five banks failed in 2008, the year the financial crisis struck with force; only three succumbed in 2007.

 

The growing number of bank failures has sapped billions of dollars out of the deposit insurance fund. It fell into the red in 2009, and its deficit stood at $8 billion as of Sept. 30.

 

The number of banks on the FDIC’s confidential “problem” list rose to 860 in the third quarter of last year from 829 three months earlier. The 860 troubled banks is the highest number since 1993, during the savings-and-loan crisis.

 

The FDIC expects the cost of resolving failed banks to total around $52 billion from 2010 through 2014.

 

Depositors’ money — insured up to $250,000 per account — is not at risk, with the FDIC backed by the government. That insurance cap was made permanent in the financial overhaul law enacted in July.

 

From:  http://finance.yahoo.com/news/Regulators-shut-3-small-banks-apf-3866917524.html?x=0

 

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