FDIC reports a rise in problem banks

By IBTimes Staff Reporter | February 23 2010 4:52 PM

The world's leading economy continues to suffer from the aftermath of the worst financial crisis in decades, whereas the U.S economy lost millions of jobs to the crisis that unveiled the weak spots in the financial system in the United States.

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Today, the Federal Deposit Insurance Committee (FDIC) reported that the number of Problem banks rose by 27 percent during the fourth quarter of 2009 reaching 702, which is considered the highest in more than 16 years, signaling that the financial sector continues to suffer from the financial turmoil and that recovery is still shaky.

FDIC chairman stated that the financial sector managed to pull $914 million of profits during the fourth quarter of 2009, where economical conditions played a major role in those profits, but they were all concentrated in the largest banks in the U.S. the same period in 2008 witnessed a total loss of $37.8 billion by banks at the peak of the crisis, FDIC Chairman Sheila Bair stated that it's not that this was a stronger quarter, it's simply that everything was so bad a year ago.

U.S regulators closed 20 banks in the United States so far this year taking the total number to 185 banks since the January 2008, where banks continue to struggle from loan portfolios that produced defaulting loans.