Situation with failed banks in bad shape
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Steve Chiotakis: It’s been a rough year so far for banks. Over the weekend, the FDIC shut down five more financial institutions, including the biggest one yet this year. Alisa Roth reports.
Alisa Roth: Colonial BancGroup, which is a mortgage lender, had about $25 billion in assets and $20 billion in deposits. The FDIC arranged for BB&T, which is a bank in North Carolina, to buy all of Colonial’s deposits and most of its assets. Colonial’s branches opened Saturday under the BB&T name.
The agency found arrangements for the other four banks too. So far this year, 77 banks have failed. That’s more than three times as many as all of last year.
The Wall Street Journal’s reporting today the situation’s pretty bad. The banks that failed in the last two years are in much more trouble than the ones that collapsed during the savings and loan crisis, and that means it’s costing the FDIC much more to pay out the insurance on those accounts. And it’s also been getting harder to find healthy banks willing to buy up the assets from failed ones.
In New York, I’m Alisa Roth for Marketplace.
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