If it's Friday, there must be a bank failing somewhere across the country. For five consecutive weeks, industry regulators have seized control of a bank after the market closed on Friday, bringing the total number of failed banks so far this year to 13. To put that into perspective, 25 banks failed in 2008, suggesting that the rate of failures is quickening as the economic crisis deepens.
"We'll have a banner year [of failures] this year," said Stuart Greenbaum, retired dean and professor emeritus at the Olin Business School at Washington University in St. Louis.
At the current rate, nearly 100 institutions-- with a combined $50 billion in assets -- will collapse by year's end.
But with more consumers and businesses likely to default on loans as the recession drags on, some industry observers think the pace of bank failures could accelerate further.
Gerard Cassidy, managing director of bank equity research at RBC Capital Markets, upped his expectations for bank failures earlier this month, warning that he anticipates 1000 institutions could fail over the next three to five years. "The sooner the bank regulators can shut down the troubled banks, the faster the industry will get back on its feet, in our view," he wrote.