FDIC's problem bank list to grow beyond 416, experts say

The Federal Deposit Insurance Corp. reported it has 416 banks on its watch list, but industry experts said that number is certain to get bigger as more commercial real estate loans mature but can't be refinanced. "These are smaller institutions, but they hold a lot of commercial real estate loans and that market will continue to deteriorate," said Bill Fitzpatrick, an analyst at Optique Capital Management. Increasingly, the principal sources of the banking industry's problems are commercial and retail loans, not residential mortgages and mortgage-linked securities, FDIC Chairwoman Sheila Bair said.

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