Regulators close banks in Neb., Fla., Ill.

The FDIC has in place a program to guarantee as much as $1.4 trillion in U.S. banks' debt for more than three years as part of the government's $700 billion financial rescue plan. Under the program, which is meant to unfreeze the credit markets, the FDIC is providing temporary insurance for loans between banks, guaranteeing the new debt in the event of payment default by the borrowing bank.

Earlier this week, Treasury Secretary Timothy Geithner revealed plans to beef up the government's efforts to spur lending and remove toxic assets from banks' books. Investors, however, were disappointed by the lack of details on how the programs would be implemented. The government has already pumped nearly $200 billion directly into banks of all sizes through preferred stock purchases.

Of the roughly 8,500 federally insured banks and thrifts, the FDIC had 171 on its confidential list of troubled institutions as of Sept. 30 — a nearly 50% jump from the second quarter and the highest tally since late 1995.

  • 1
  • |
  • 2
Join the Discussion
blog comments powered by Disqus
You Might Also Like...