If anyone were still in doubt as to whether or not the United States economy is in recession, the FDIC’s problem list now includes 90 banks at risk of failure. This is not a large number, since there are about 8,500 banks in the country, but it is up from 76 last year.
Historically, only about 13% of banks on the FDIC problem list do fail, and those that cannot correct their problems are either sold to another bank or taken over by the FDIC.
If the bank does fail and is not sold, consumers with less than $100,000 in the bank do not need to worry; the FDIC has those accounts covered.
Just to make the point, following on the heels of IndyMac’s collapse, two more banks recently went under and were quickly snapped up by Mutual of Omaha Bank. Customers of First National Bank of Nevada and the First Heritage Bank will find a new sign on the door today, but business will otherwise go on as usual.
While it is definitely not time to panic, anyone with more than $100,000 in a bank account would be wise to split up that cash between two or more banking institutions.