Small Banks Still Struggle
By Steve Viuker
A P is reporting that larger banks are thriving; while small ones are struggling. All of the 118 banks that have failed this year have been smaller or regional banks. Last year 140 banks shuttered, most of them small institutions.
Most of the biggest banks have recovered with help from federal bailout money, record-low borrowing rates from the Federal Reserve and the ability to earn big profits from fees on banking services and investment fees
FDIC Chairman Sheila Bair said banks' lending standards are beginning to ease for some types of credit. But lending will not pick up until businesses and consumers gain the confidence they need to hire and spend," Bair said.
Bair said the economic recovery is starting to be reflected in banks' higher earnings and the improved quality of loans, with fewer defaults and delinquencies.
Last year, 140 federally insured institutions failed and were shut down by regulators. It was the highest annual number since 1992, when the savings and loan crisis hit its peak. Last year's failures extended a string of collapses that began in 2008, triggered by loan defaults in the financial crisis.
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September 1, 2010 9:30 AM
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