The graph that appears below shows the increase since August 2009 in the number of banks on an unofficial problem bank list provided courtesy of Bill McBride’s Calculated RISK blog. McBride credits a blogger by the name of “surferdude808” for creating a proxy for the Federal Deposit Insurance Corporation (FDIC) which is only published quarterly.
CAMELS is an acronym for the FDIC rating system that is based on —Capital adequacy, Asset quality, Management, Earnings, Liquidity and Sensitivity to market risk. According to McBride, surferdude808 creates his list of potential problem banks based on publicly announced formal enforcement actions, and also media reports and company announcements that suggest an enforcement action is likely
This unofficial list of potential problem banks has grown by forty percent between August 2009 and November 2009. This unofficial count is close, but slightly lower than the official FDIC list. McBride thinks the difference may have to do with data timing issues. In any event, the trend line is moving in the wrong direction. As of October 20, 2009, the FDIC insured deposits mat 8,195 financial institutions.