With so many bank failures, FDIC's coffer have been depleting very fast and it actually recorded a deficit to the extent of US$20.7 billion as of March 31. More importantly, the number of banks on the FDIC's "problem" list jumped to 775 in the first quarter, from 702 three months earlier, even as the industry as a whole had its best quarter in two years.
Clearly the small and midsized banks are the most vulnerable given their heavy exposure to real estate sector where the pain continues.
The FDIC expects the cost of resolving failed banks to total around $60 billion from 2010 through 2014. The only thing that is positive about all these developments is that lot of inefficient players are being cleaned out of the system which is likely to emerge healthier in years to come.