This week the FDIC had to close seven more banks, for a cost of a bit under $500M.
On the one hand that’s better than we’ve seen most weeks of the last few years. On the other hand, in all of 2005, 2006, 2007, and the first half of 2008 there were only seven banks closed, total, for a cost of under $350M total.
So, better is nice, but we’ve got a ways to go to be back in the good old days.
Note that most of the FDIC-insured banks that had big exposures to home loans are already gone. The ones failing now are the ‘normal’ cyclical failures due to the recession: mostly personal and small-business bankruptcies causing banks to take losses.
The rate of these failures won’t slow more until the economy is growing more robustly.