bank run

A new look at the banking sector shows huge losses in the first quarter of 2008. The Federal Deposit Insurance Corp., which insures bank deposits up to $100,000, reported that U.S. financial institutions earned $19.3 billion in the quarter, down 46 percent from $35.6 billion in the first quarter of 2007.

Earlier this year, the FDIC began trying to lure roughly 25 retirees like Holloway back to prepare for an increase in bank failures. It’s also hiring about 75 new staff.

he number of banks in financial trouble nationwide is expected to grow this year, but any failures should be manageable, one of the country’s top banking regulators said Tuesday. New data on the Federal Deposit Insurance Corp.’s so-called troubled-bank list will show an increase over the current 76 banks on the list, Sheila Bair, chairman of the FDIC, said. But, she cautioned “that is not a big number” and that increase will not necessarily lead to a wave of bank failures.

As if the economy wasn't already fighting enough strong headwinds, the risk of capital shortfalls and outright failure of the nation's banks is rising. The Federal Deposit Insurance Corp., the federal agency that backs bank deposits, last week reported the biggest jump in "problem institutions" it has seen since the savings and loan crisis of the late 1980s. While the extent of the problem is still low by historic standards, it identified 76 banks as in trouble - a 52% increase from a year ago.

Despite NT$2.5 billion (US$80.4 million) in cash on hand, the credit unit of the Shulin Farmers' Association (樹林農會) in Taipei County has suffered a bank run after more than 700 depositors withdrew a total of NT$840 million as of yesterday morning, a government official said. "NT$140 million was withdrawn through the association's ATMs during the weekend and some NT$700 million was withdrawn before noon," Lai Wu-chi (賴武吉), director-general of the Council of Agriculture's bureau of agricultural finance, said during a telephone interview yesterday.

Dozens of U.S. banks will fail in the next two years as losses from soured loans mount and regulators crack down on lenders that take too much risk, especially in real estate and construction, an analyst said.

The future of Mervyn King as Governor of the Bank of England was being openly questioned last night after the bungled handling of the Northern Rock crisis. Pressure grew as the Bank was forced to pump £4.4 billion into the financial system to head off a meltdown. The decision amounted to a major U-turn for the Bank and Mr King, who had previously been reluctant to put more money into the market.