“Although the numbers are improving—140 banks failed in 2009 and 157 failed in 2010—an analysis by The Wall Street Journal suggests that failures are down, at least in part, because troubled banks aren’t failing as quickly. Weak banks are staying alive for longer periods in undercapitalized condition and they are in weaker shape when they fail than in the past.”
“This and the fact that 844 institutions remain on regulators’ problem-bank list suggests failures will be a part of the landscape for many months, maybe years, as weak banks take a long time to recover or fail, analysts and banking industry participants said. The weakness also underscores the industry’s divide between healthier larger banks and struggling smaller banks.”
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