Wednesday, December 16, 2009

Bank Failures Reach 133

Three more U.S. banks were closed on Friday, bringing the total number of bank failures this year to 133.

Apparently, things will get worse in 2010.

FDIC Chair Sheila Bair told CNBC that bank failures will continue to accelerate into next year despite "some encouraging signs" that things are turning around for the battered industry. Bair did not quantify how bad the failures would get, but said the worst isn't over yet for institutions that will suffer even as the economy improves:

The continuing bank failures will be driven by unusually high unemployment that is expected to lead to more foreclosures and other commercial loan failures.

So far, the total cost of the 133 failures to the FDIC fund is more than $28 billion.

The FDIC recently announced that 552 banks are at risk of going under.

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