Feds Brace for a Wave of Bank Failures

FDIC hires extra staff to help with boost in 'problem' banks
By Jim O'Neill,  Newser User
Posted Feb 26, 2008 7:13 AM CST
Federal Deposit Insurance Corporation (FDIC) Chairwoman Sheila Bair, testifies on Capitol Hill in Washington, Thursday, Jan. 31, 2008.   (Associated Press)
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(Newser) – Federal regulators are gearing up for as many as 100 bank failures in the next year—the most since the savings and loan crisis that saw more than 1,000 S&Ls go belly up in the ’80s and ’90s—as the subprime contagion continues to decimate the health of US financial institutions, reports the Wall Street Journal today.

The Federal Deposit Insurance Corp., which insures bank customers’ accounts up to $100,000 at some 8,000 banks and thrifts, said “problem” institutions increased 38%, to 65, in the third quarter of 2007, compared to a year earlier. The agency was looking to rehire 25 recent retirees with experience in administering bank failures, and to contract a firm experienced in administering mortgages to help with the expected workload increase.