I'm sure the president would tell us that "Hey! Without my brilliant policies, it could have been worse:"
The FDIC expects the wave of bank failures that started in 2008 to peak sometime this year. Lending activity has picked up in some areas and many troubled firms have found new sources of capital.Because of changes to bank rules, fewer banks are going under than during the Great Depression or Savings and Loan crisis. But that doesn't mean that thousands of other banks aren't underwater and receiving assistance from the FDIC.
FDIC spokesman Andrew Gray said the agency expects the number of failed banks to exceed last year's total of 140, though he added that failures this year will not approach the historic levels seen during the savings and loan crisis. In 1989, a record 534 banks were closed by regulators.
Still, banks have been failing at a rapid pace this year. At this time in 2009, regulators had closed a total of 57 banks.
It is more likely that your neighborhood bank with only a few branches is suffering rather than big regional our national outfits. And the big boys on Wall Street?
Analysts expect small banks to remain the most likely to fail. Regional lenders continue to suffer from mounting loan losses, particularly in areas like commercial real estate. Big financial firms, on the other hand, have largely returned to profitability.That "return to profitability" is courtesy of the American taxpayer for the most part. And the capacity of the FDIC to assist troubled banks has been increased by a factor of 3 so that the massive failures of the depression aren't being repeated.
But given the state of the economy in most areas, we will see continued failures of small banks well into 2012 and beyond as Obama destroys the banking system in order to save it.