The FDIC is bracing for the next wave of failures…

The numbers of failed or troubled banks are at their highest levels  since 1992.  Now the FDIC is bracing for the next wave that will likely cost the agency billions of dollars.  Quite frankly their isn’t enough man power to keep up with the failing banks.  The FDIC is running to keep up with the rising losses to its insurance fund, which protects people’s deposits.  In February the agency announced ” it had placed 702 lenders on its list of “problem” banks, the highest number since 1993.”  Luckily, they also state that they think they have the funds to cover these losses.  “Despite resurgent profits and pay at the giants of American finance, many of the nation’s 8,000 banks remain under stress, according to a quarterly report the FDIC released.”

With so many banks failing, the FDIC has been severely depleted and at the end of 2009 it carried a negative balance of$20.9 billion.  The FDIC has been quick to replace these deficiencies though.  With special assessments on banks being collected before their due date of 2012 they feel that the “industry will power through this and …they don’t expect the taxpayer to ride to the rescue”.

Source – Business Section of The New York Times