20th bank failure in '08

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20th bank failure in '08

Written by Administrator

Monday, 24 November 2008 14:01

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The 20 bank failures so far this year compare with three for all of 2007 and are far more than in the previous five years combined. It's expected that many more banks won't survive the next year of economic tumult. The pressures of tumbling home prices, rising mortgage foreclosures and tighter credit have been battering many banks, large and small, nationwide.

This year's failures include Seattle-based thrift Washington Mutual Inc. in late September, the biggest bank collapse in U.S. history. It had $307 billion in assets. In July, another big savings and loan, IndyMac Bank based in Pasadena, Calif., failed and was seized by regulators with about
$32 billion in assets.

The FDIC estimates that through 2013 there will be about $40 billion in losses to the deposit insurance fund, including an $8.9 billion loss from the failure of IndyMac Bank.

The FDIC is raising insurance premiums paid by banks and thrifts to replenish its fund, which now stands at around $45.2 billion, below the minimum target level set by Congress and the lowest level since 2003.

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