1988 Bank Failures Expected to Top Record Set Last Year

Article excerpt

HONOLULU (AP) - U.S. commercial bank failures are expected to surpass last year's record level by the end of 1988, with Southwest institutions continuing to require the most federal assistance, the head of the Federal Deposit Insurance Corp. said.

But FDIC Chairman L. William Seidman said the agency remains in good shape and is expected to have reserves of $15 billion to $16 billion at the end of the year despite the mammoth bailout of First RepublicBank Corp. and a recent call for help by MCorp, both in Dallas.

Meanwhile, Seidman and Comptroller of the Currency Robert Clarke reiterated their opposition to a possible merger of the FDIC, which insures deposits of about 14,000 banks and savings institutions, and the troubled Federal Savings and Loan Insurance Corp., which insures 3,200 savings and loans. Both organizations cover deposits of up to $100,000.

Seidman told a news conference at the American Bankers Association's annual convention that by the end of 1988 as many as 250 banks will have failed or needed federal assistance to stay afloat.

Last year a record 184 FDIC-insured institutions failed and 19 received federal assistance. …