What About The 9 Billion Hit Since June 30th?

These are numbers as of the end of June. In just the last 2 weeks the FDIC took a $7 billion hit. Since June 30th the fund has lost over $9 billion. The FDIC is virtually broke and will be hitting up the taxpayers very shortly. This is only the 3rd inning of the banking crisis, many more banks will be failing in the months to come. Stay within FDIC limits in all your accounts.-Lou

FDIC Insurance Fund Shrinks to $10.4 Billion

WASHINGTON (WSJ)-- The Federal Deposit Insurance Corp.'s fund that protects more than $4.5 trillion in U.S. bank deposits fell to just $10.4 billion at the end of June, as the banking industry continues to struggle with souring loans and regulators brace for pain in trying to clean up the mess.

The level of the FDIC's fund, the lowest since the savings and loan crisis, almost guarantees that the government will have to hit the banking industry with another special fee to recapitalize its reserves. Officials could also consider borrowing up to $100 billion from the Treasury Department, but government officials have avoided this option so far.

The FDIC was created specifically for times such as these," FDIC Chairman Sheila Bair said. "No matter how challenging the environment, the FDIC has ample resources to continue protecting depositors as we have for the last 75 years."

The deposit insurance fund topped $45.2 billion a year ago.

The agency said it had 416 banks on its "problem" list at the end of the second quarter, up from 305 at the end of March. Banks on the problem list are considered a higher risk of failure and face tougher regulatory scrutiny. The FDIC said the total assets of banks on the problem list was $299.8 billion, which suggests that Citigroup Inc. and some of the country's other largest banks, remained off the list.

..........The FDIC also said borrowers are falling behind on loans at record levels and across most major loan categories. The number of loans at least 90 days past due climbed for a 13th consecutive quarter, while the percentage of loans at least three months overdue hit 4.35%, the highest level recorded since the FDIC began collecting this data 26 years ago.

"Deteriorating loan quality is having the greatest impact on industry earnings as insured institutions continue to set aside reserves to cover loan losses," Ms. Bair said.
The biggest problem areas continued to be property-related loans, suggesting the housing market is still under stress despite some recent good news. The FDIC said residential mortgage loans at least 90 days past due climbed 12.7% in the quarter, construction and development loans at least three months behind increased 16.6%.