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Forecast: 150-200 more bank failures

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posted on Aug, 24 2009 @ 03:06 PM
Far from being out of the water yet...

NEW YORK (Reuters) - A prominent banking analyst said on Sunday that 150 to 200 more U.S. banks will fail in the current banking crisis, and the industry's payments to keep the Federal Deposit Insurance Corp afloat could eat up 25 percent of pretax income in 2010.

Richard Bove of Rochdale Securities said this will likely force the FDIC, which insures deposits, to turn increasingly to non-U.S. banks and private equity funds to shore up the banking system.

"The difficulty at the moment is finding enough healthy banks to buy the failing banks," Bove wrote.

The FDIC is expected on August 26 to vote on relaxed guidelines for private equity firms to invest in failed banks, after critics said previously proposed rules were too harsh and would actually dissuade firms from making investments.

Bove said "perhaps another 150 to 200 banks will fail," on top of 81 so far in 2009, adding stress to the FDIC's deposit insurance fund.

another 150-200 banks will fall...mmmm makes you feel all warm and snuggly doesn't it?

When a bank closes, where does the peoples money go? Do they get it back? What about safe deposit boxes, do they get those back too?
Sure hope so.

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