More evidence that all is not well in the financial system, despite the fact that we’ve managed to prop up the giants.
The FDIC seized five more banks yesterday, bringing the total this year to a staggering 45. In each of the cases, the FDIC is giving the bank and its assets to a competitor, while swallowing some of the losses itself.
CNN: The total cost of Friday’s bank failures to the FDIC is $264.2 million, bringing the total for this year to $11.94 billion. That compares with $17.6 billion in all of 2008.
The number of bank failures so far this year has already exceeded last year’s total of 25, with an average of 7 failures per month.
Over the next 5 years, the FDIC expects roughly $70 billion in losses due to the failures of insured institutions.
The lesson for small banks: Grow to the size where you’re too big to fail.