Number of troubled banks in US on rise
Friday, 26 November 2010
From Fazle Rashid
NEW YORK, Nov 25: The number of troubled banks in the US is on rise but the big ones have rebounded. The Federal Deposit Insurance Corporation's (FDIC) catalogue of the trouble banks, said banks with highest risk of failing has surged to 860. These banks are saddled with bad real estate loans. The United States' 7760 banks have made a profit of $4.5 billion. The figure represents an increase of $2.0 billion than the earnings of the previous year.
Repayments of loans have vastly improved. Lendings however remain weak. Bankers do not anticipate an increase in lending with economy still fragile. Ms. Sheila Blair, CEO of FDIC, is cautiously optimistic about nation's banks but industry has come a long way in cleaning up balance-sheets and building capital, the New York Times quoted her saying. Regulators are of the view that banks "ultrathin" reserve exacerbated the financial crisis and are eager to avoid a repetition. United States' 19 major banks have been put under a new round of stress test to determine their ability to absorb losses during a prolonged downturn. With number of failing banks increasing the FDIC is now facing a severe resource crunch.
The FDIC carried a negative balance of $8 billion. The agency officials fear that failure of banks will drain out $100 billion from its reserve. FDIC is planning to recoup the losses by imposing a higher premium. Sheila Blair however said her agency had ample of resources.
The shares on the Wall Street declined precipitating heightened uncertainty over conflict in Asia and debt crisis in Europe. The tension between South Korea and North Korea have had its impact on the economy but more serious is continued debt crisis in Europe. The Federal Bureau of Investigation (FBI) swung into action raiding three hedge funds offices to investigate the allegations of "insider trading".
NEW YORK, Nov 25: The number of troubled banks in the US is on rise but the big ones have rebounded. The Federal Deposit Insurance Corporation's (FDIC) catalogue of the trouble banks, said banks with highest risk of failing has surged to 860. These banks are saddled with bad real estate loans. The United States' 7760 banks have made a profit of $4.5 billion. The figure represents an increase of $2.0 billion than the earnings of the previous year.
Repayments of loans have vastly improved. Lendings however remain weak. Bankers do not anticipate an increase in lending with economy still fragile. Ms. Sheila Blair, CEO of FDIC, is cautiously optimistic about nation's banks but industry has come a long way in cleaning up balance-sheets and building capital, the New York Times quoted her saying. Regulators are of the view that banks "ultrathin" reserve exacerbated the financial crisis and are eager to avoid a repetition. United States' 19 major banks have been put under a new round of stress test to determine their ability to absorb losses during a prolonged downturn. With number of failing banks increasing the FDIC is now facing a severe resource crunch.
The FDIC carried a negative balance of $8 billion. The agency officials fear that failure of banks will drain out $100 billion from its reserve. FDIC is planning to recoup the losses by imposing a higher premium. Sheila Blair however said her agency had ample of resources.
The shares on the Wall Street declined precipitating heightened uncertainty over conflict in Asia and debt crisis in Europe. The tension between South Korea and North Korea have had its impact on the economy but more serious is continued debt crisis in Europe. The Federal Bureau of Investigation (FBI) swung into action raiding three hedge funds offices to investigate the allegations of "insider trading".