By Dakin Campbell and Michael McKee
Oct. 24 (Bloomberg) -- U.S. regulators closed more than 100 banks in a single year for the first time since 1992, signaling the financial crisis hasn’t abated for lenders struggling with mounting losses tied to commercial real estate.
Seven banks -- three in Florida and one each in Georgia, Wisconsin, Minnesota and Illinois -- were shut yesterday, according to the Federal Deposit Insurance Corp., pushing this year’s total to 106. That’s the most since the savings-and-loan crisis led regulators to shutter 179 institutions in 1992.
“It’s very painful, it costs a lot of money, it ruins careers,” said Gerard Cassidy, an RBC Capital Markets analyst in Portland, Maine. “But shutting down failed banks and writing off the bad loans is a necessary solution that has to be done to get the economy and the banking system back on its feet.”
Banks looking to weather the storm of bad loans have slowed lending to U.S. consumers and sought ways to preserve and raise capital. U.S. financial institutions have suffered about $1.1 trillion in credit losses and writedowns since 2007. The nation’s unemployment rate rose to 9.8 percent in September, the highest since 1983, according to the Labor Department. A record 531 lenders were seized in 1989, according to the FDIC’s Web site, which cites data back to 1934.
In August, the FDIC said 416 banks with combined assets of $299.8 billion were on its list of “problem” lenders at mid- year. It isn’t known whether the banks closed yesterday were among them because the FDIC doesn’t release the list.
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more:
http://www.bloomberg.com/apps/news?pid=20601091&sid=a464OcFDguywLatest crisis courtesy of Bu**sh** The Younger.
1992 S & L crisis courtesy of Reagan and Bu**sh** The Elder.
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