A surge in earnings by the biggest banks at the end of last year made 2011 the most profitable time for the industry in five years. More earnings and fewer troubled banks suggest the industry has healed since the 2008 financial crisis.
The number of government-aided U.S. banks in danger of failing has grown about 15% in the past six months, The Wall Street Journal has reported. The economy has continued to batter many struggling institutions, with 98 bailed-out banks -- up from 86 in the second quarter -- now at risk.
Bank of America challenges testimony by one of its operational leaders -- that Countrywide may have held on to homeowners' notes that it should have put into a trust. But the testimony is reinforcing fears that BofA is in big trouble.
The financial headlines of the last several months have shown large banks making near-record profits, and small banks being closed at a pace of three or four per week. The FDIC has released its comprehensive report on the industry for the third quarter, and it confirms that fairly positive assessment.
Nouriel Roubini, the renowned NYU economics professor with the nickname "Dr. Doom," has offered up another dire prediction: Even if the U.S. and Europe manage to avoid a double-dip recession, more than 400 U.S. banks will likely fail.
Over the weekend, the FDIC announced the seizure of seven banks, bringing the 2010 tally to 103. It's very possible that 2010 failures could surpass 2009, but the forecast improves starting in 2011.
The Congressional Oversight Panel's December report on TARP concluded that it "proved decisive enough to stop the panic and restore market confidence," but failed to address many of the "ongoing problems" in the financial markets and the broader economy. However, it didn't call for ending the program.
