Mortgage Rate News

The U.S. continues to see an increasing number of banks considered “problem”. A report from the FDIC for the last quarter of 2009 shows that there were 702 banks on the “troubled” list. This was up from 552 banks on the list for the third quarter of 2009. Clearly, banks are still struggling. As a result, it is a good idea to review which of your accounts are covered by FDIC insurance, and make sure that you are prepared in case your bank fails.

However, even though some banks appear to be showing signs of trouble, the financial industry, overall, is doing just fine. The Financial Times reports on a separate finding with regard to the financial industry:

A separate report on Tuesday showed Wall Street bonuses topped $20bn last year, rising 17 per cent from 2008, as US banks emerged from their worst downturn in decades.

Industywide profits might have exceeded $55bn, almost three times the previous record, as stocks rallied and debt markets reopened, according to a report by Thomas DiNapoli, the New York State controller.

The average taxable bonus rose to $123,850 last year, Mr DiNapoli said.

Clearly, despite the trouble some banks are in, there are plenty of other banks that are recovering nicely, able to hand out bonuses and rake in the profits. Although it might interesting to see if some of the banks reporting profits might also be on the troubled list.

Problem assets remain in the system, to the tune of $402.8 billion. These assets have yet to work their way through banks and work their way of balance sheets. However, with mortgage delinquencies slowing, it is possible that some of those assets won’t turn into defaults. Clearly, there is still some rough water to get through before we get over the aftershocks on the financial crisis. But, even with trouble assets remaining, it looks as though the financial sector as a whole is doing alright — and well on its way to recovery.