Spike in warnings for troubled banks may presage more failures


Regulators are telling more troubled financial institutions to clean up their acts, a sign that this year's surge in bank failures is likely far from over.

The number of banks warned to halt practices deemed "unsafe and unsound" by banking industry overseers surged by about a third in the second quarter to 86, according to data compiled by MortgageDaily.com.

Being on the receiving end of such an admonition is a bad sign because many such banks prove too damaged to turn themselves around. Two dozen lenders censured from April to June have already been seized by regulators.