US Bank Failures Total 90 & Growing

Image by marctonysmith via Flickr

One of the first indicators of major trouble in the US economy last year was the failure of Washington Mutual Bank which seemingly occurred overnight.


As it turns out, Washington Mutual was only the first of many banks and thrift institutions to fail. The total now exceeds 90 banks and thrifts and is growing at a rapid rate with the potential to exceed 150 banks by the end of 2010.

This has placed an enormous strain on the cash reserves at the Federal Deposit Insurance Corporation (FDIC) whose balance sheet currently shows that they are operating with reserves 75% below the mandated minimum.


In response to this situation, the major surviving banks are viewing this as an opportunity to purchase failed or failing banks and thrifts at pennies on the dollar.

Structured properly, some of the banks can be purchased with no cash whatsoever simply to ensure to the FDIC that the bank’s customers see continuity in the daily operation of the institution. Nothing would be politically more damaging than to have the banks shut their doors and deny customers access to their accounts.

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