FDIC doesn’t see another bank failure?

July 23, 2008 by · Leave a Comment
Filed under: Bank Failure, Industry News 

FDIC put out an article today stating that they do not expect another bank failure on the scale of the failed financial bank of IndyMac. Personally, I feel that they are just playing lip service to keep the masses calm so as more warning signs come out, there will not be a “run on the bank”.

The reason I believe they are down playing the risk of more major bank failures because I found this small little piece on the Wall Street Journal:

“The Federal Deposit Insurance Corp. is taking steps to brace for an increase in failed financial institutions as the nation’s housing and credit markets continue to worsen.

The FDIC is looking to bring back 25 retirees from its division of resolutions and receiverships. Many of these agency veterans likely worked for the FDIC during the late 1980s and early 1990s, when more than 1,000 financial institutions failed amid the savings-and-loan crisis.

FDIC spokesman Andrew Gray said the agency was looking to bulk up “for preparedness purposes.” The division now has 223 employees, mostly based in Dallas.”

In my opinion this is a closer to the reality of the situation, you decide. Here is the Reuters article about no more major bank failures:

Reuters:

The Federal Deposit Insurance Corp does not expect to take over another failed bank similar in size to IndyMac Bancorp Inc or larger, FDIC Chairman Sheila Bair told Reuters on Tuesday.

“Based on the supervisory data and financial data I have, I would be very surprised if we had failures of that size institution or larger,” Bair said in an interview before delivering a speech about consumer protection.

“Based on what I’m seeing now, I really don’t see we will have institutions of that significant size having serious problems,” she said.

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