(10-26-09) According to Bloomberg, the FDIC said 416 banks with combined assets of $299.8 billion were on its list of "problem" lenders at mid year.

Meanwhile 106 banks have been closed by regulators this year to date. This compares with 179 banks which were shut down during the Savings and Loan Fiasco of 1992.

Last week FDIC Chairman Sheila Bair told a Senate subcommittee on financial institutions -- "The most prominent area of risk for rising credit losses at FDIC-insured institutions during the next several quarters is in Commercial Real Estate lending."

What does it mean?

The FDIC has a pretty good handle on the number of bank failures which they predicted would be about 130 in 2009, and it looks like they're going to be right on target.

Next year is the problem. The explosion of bank failures, as Sheila Baird points out, is yet to come.

There's a big debate going on now regarding bank failures in 2010. The FDIC is saying 300+, but the national bankers' association is saying 500.