The number of banks on the government’s “problem bank” list surpassed 400 in the latest quarter, reaching its highest level in 15 years. As a result of numerous large and costly bank failures, the FDIC’s funds were depleted by $2.6 billion, or 20% during the quarter.
Banks lost a combined total of $3.7 billion in the second quarter, caused in part by their decision to put money aside to shield themselves from bad loans. To make matters worse, the number of borrowers behind on payments rose to 4.35%- the highest level since banks first started reporting that data in 1983.
Concerns over the depleted funds have prompted plans for a special assessment sometime next month to help replenish the insurance fund, but it’s uncertain whether the precautionary measures would prevent the FDIC from having to tap its $500 billion credit line from the Treasury Department, which was approved earlier this year.
Curious about how safe your bank is? Check out Bankrate’s free “Safe & Sound®” service, which rates a financial institution’s safety by a series of 22 tests measuring their capital adequacy, asset quality, profitability, and liquidity.
http://money.cnn.com/2009/08/27/news/companies/fdic_list/?postversion=2009082713
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