100 Banks Go Down

The FDIC closed seven more banks last Friday, and that brings the total FDIC bank failures to 106 in 2009. This represents about 1% of the 8,195 FDIC-insured institutions.

Under the solid leadership of Sheila Bair, the FDIC has been doing a good job of handling this challenge. (In 2008 Forbes ranked her as the second most powerful woman in the world behind German chancellor Angela Merkel.)

Here is where the major bank failings occurred this year, and in the upper right-hand corner you can see the cumulative total year-to-date.


That dollar amount is great. It is also instructive to see how many banks have failed in recent years compared to the problems which arose during the S&L Crisis and in the 1930s with the Great Depression.


FDIC analysis shows that the assets of the 106 failed banks in 2009 totaled $106 billion, which represents only 8/10 of one percent of the total U.S. bank assets currently total $13.3 trillion. During the peak of the S&L crisis in 1989, failed bank assets were 3.5% of total bank assets, or more than four times the current level.

I now invite you to listen to a message from FDIC Chairman Sheila Bair.