Finance News

FDIC estimates losses at $24.18 billion for 2010 failures

U.S. bank failures in 2010 cost the Federal Deposit Insurance Corp (FDIC) $2 billion, or 9 percent, more than initially forecast, according to a new analysis by SNL Financial.

The rise exceeds in the increase seen in 2009, and highlights the higher-than-expected costs related to the failure of three Puerto Rico-based banks.

The FDIC's 2010 loss estimate for bank failures rose to $24.18 billion at year's end, up from initial estimates of $22.17 billion. The bank regulator increased the loss estimate for 102 out of 157 banks that failed in 2010, according to SNL Financial.

In contrast, the FDIC's estimate for fund losses in 2009 increased by $600 million by year's end. The largest increase in FDIC's 2010 loss estimates was for Mayaguez, Puerto Rico-based Westernbank Puerto Rico.

The lender was shuttered on Aug. 31, 2010. At the time, the FDIC estimated the closure would create a loss of $3.31 billion for the regulator's deposit insurance fund. That estimate was raised at year-end by nearly a billion dollars to $4.25 billion, SNL's research showed.

Source: Reuters
Date: 14.05.2011 [ID: 289]

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