Wednesday, August 27, 2008

Number of struggling US banks rises to 30%

The continuing deterioration in the health of the US banking system was highlighted yesterday when a leading regulator said the number of troubled institutions climbed by 30 per cent during the second quarter.

The Federal Deposit Insurance Corporation said the number of banks on its “problem list” had grown from 90 institutions at the end of the first quarter to 117 at the end of June – the highest figure since early 2003. The combined assets of struggling banks increased dramatically in the three months from $26bn (€17.8bn, £14.1bn) to $78bn.

Sheila Bair, chairman of the FDIC, warned that both trends were likely to continue. “More banks will come on the list as credit problems worsen,” she said. “Assets of problem institutions also will continue to rise.”
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