FDIC list of troubled banks at a 16-year high

Bank tellerBanks are still unhealthy. If anyone doubted that, it was made official when The New York Times and other news outlets began reporting early this week that the Federal Deposit Insurance Corporation had announced that 450 banks had been added to the list of troubled financial institutions.

Just why is this important?
It may not be all that important to you, actually. Every quarter, the FDIC comes out with news on how the banks are faring, and this is just the latest report. That 450 banks have been added to the list doesn't mean they're all going to fail. Odds are, many of them won't. And there was good news in the FDIC report, which noted, "For the first time in three years, more than half of insured institutions reported year-over-year improvement in net income."

Not that I want to whitewash this. The FDIC's list of challenged lenders is currently at 702, a jump of 27% in the past three months. That's not good news.

And yet this has all pretty much been as expected.

"Consistent with a recovering economy, we saw signs of improvement in industry performance," FDIC Chairperson Shelia C. Bair said in the FDIC's press release about the troubled bank list. "But as we have said before, recovery in the banking industry tends to lag behind the economy, as the industry works through its problem assets."

And if your bank is somehow on the troubled list (the FDIC never makes that list public) and fails in 2010, or in any year, as long as you have $250,000 or less in your account, it's insured by the FDIC. If you have more than that in one account and are concerned, you may want to talk to your banker -- and check out this handy FDIC web page.
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