Tuesday, August 26, 2008

"Problem List" of Banks Growing, but 1/15th that of the S&L Crisis

Per Bloomberg:

The U.S. Federal Deposit Insurance Corp. said its "problem list'' of banks increased 30 percent in the second quarter to the highest total in five years as more commercial real-estate loans were overdue.

What do most of these banks have in common? Commercial Real Estate Loans...

Many banks on the list have high levels of commercial real- estate loans, especially in construction and development loans, said John Corston, the FDIC's associate director of large bank supervision.
Still, things are currently not so bad. With over 8500 banks in the U.S., 117 is a drop in the bucket compared to the S&L Crisis (great chart here), when 1500+ banks were on the problem list.

Source: Bloomberg


  1. That IndyMac wasn't on the list now makes me wonder how useful their problem list is in predicting problems.

    That WaMu isn't now on the list removes any doubt: this isn't a useful statistic to use for forecasting problems with a particular bank, and by extension, a problem with the entire sector.

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