US banks are lurching from crisis to crisis. As reported here, the number of banks on the Federal Deposit Insurance Corp's confidential "problem" list has grown. According to the FDIC, the list of troubled banks rose to 860 in the July-September quarter from 829 in the previous quarter. This is the highest number since March 1993 when there were 928 institutions on the list.
True, there are some positive signs like a decline in the number of bad loans. But then, that might reflect fewer companies borrowing.
So far this year, 149 institutions have been forced to close their doors and if the FDIC data is anything to go by, there will be many more.
Analyst Meredith Whitney predicts that US banks will shut 5000 branches over the next 18 months and the Financial Times tells us that the FDIC's reserves for bad loans have fallen for the first time since the start of the financial crisis.
The numbers are telling us one thing: with US banks, things are going to get a lot worse before they get better.
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