FDIC faces looming problem of bank failures

08/17/2009 | Wall Street Journal, The

The Federal Deposit Insurance Corp.'s estimated cost for the more than 100 banks that have collapsed during the financial crisis is at an average of 25% of assets. Between 1989 and 1995, the FDIC closed nearly 750 financial institutions at an average cost of 19% of assets. "Compared to the savings-and-loan crisis, banks these days have gotten much bigger and the economy has gotten much bigger," said Bob Patten, a Morgan Keegan & Co. analyst. "This crisis won't eclipse the last one in size, but the costs to the FDIC are showing the amount of leverage they really had on their books."

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