FDIC’s “Problem Bank” List Grows to 252by Tim Manni
On Thursday the Federal Deposit Insurance Corporation (FDIC) announced that their list of troubled banks increased from 171 to 252 in the last three months of 2008 — the largest total since the middle of 1995.
While many consumers would love to get their hands on this list, Federal officials — realizing the potential for disaster — do not release this information to the public. Revealing such information could cause consumers to panic, likely resulting in a run on bank deposits — similar to what happened at IndyMac.
What issues prompt the FDIC to add institutions to their “problem list?”
Problem banks typically face difficulties with their finances, or are suffering through operations or management issues that pose a threat to their existence.
The institutions that wind up on the list are considered the most likely to fail, although few of them actually reach that point. On average, just 13% of banks on the FDIC’s problem list have failed.
Click here to read the FDIC’s “When a Bank Fails – Facts for Depositors, Creditors, and Borrowers.”