bank failure

Nearly 50 investigations were launched by the Federal Insurance Corporation (FDIC) into the US banks that have failed since the start of the financial crisis, reports the Wall Street Journal.

The regulator is probing former executives, directors and employees at failed U.S. banks and is taking efforts to punish alleged recklessness, fraud and other criminal behavior, the Journal said.

John Kanas, a CEO of BankUnited, reiterated his forecast for the banks in the United States. He predicts that a thousand banks will fail in the next year or two.

“There is an overcapacity in the banking industry and that will be taken care of,” he said. “We lost 140, 150 last year; we’re on track to lose a similar amount this year. We lost 25 or 30 the year before.”

Earlier in August Kanas made the same forecasts.

 Regulators shut down two banks in Florida and one in California on Friday, boosting to 123 the number of U.S. bank failures this year as loan defaults rise in the worst financial climate in decades.

The Federal Deposit Insurance Corp. took over Orion Bank, based in Naples, Fla., with about $2.7 billion in assets and $2.1 billion in deposits, and Sarasota-based Century Bank, with $728 million in assets and $631 million in deposits.

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