FDIC Plans for Rise In Bank Failures

Anticipating a surge in troubled financial institutions, federal regulators aim to increase by 60 percent the number of workers who handle bank failures.

The Federal Deposit Insurance Corp. wants to add 140 workers in the division that handles bank failures, bringing the total to 360, said John Bovenzi, the agency's chief operating officer.

"We want to make sure that we're prepared," Bovenzi said yesterday, adding that most of the hires will be temporary and based in Dallas.

There have been five bank failures since February 2007 following an uneventful stretch of more than two years. The last time the agency was hit hard with failures was during the 1990-91 recession, when 502 banks failed in three years.

Analysts predict more failures but said they don't think they will reach early-1990s levels.

Gerard Cassidy, managing director of bank equity research at RBC Capital Markets, projects 150 bank failures over the next three years, with the highest concentration coming from states such as California and Florida where an overheated real estate market is in a fast freeze.

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