Closely Watched Banks

The soundness of commercial banks is a primary concern of banking regulators, investors, depositors, and the public at large. The number of financially troubled banks in the United States has increased significantly over the past two years. As of year-end 1983,631 banks were on the Federal Deposit Insurance Corporation’s list of problem banks, up from 369 at year-end 1982 and 223 at year-end 198I.l The number of banks that actually failed also rose to post-Depression highs in the last two years. High interest rates, poor economic conditions, and deregulation have, in fact contributed to below-average performance and financial difficulties for many banks.