FDIC chief says big bank failures not likely

Sheila Bair (L), chairman of the Federal Deposit Insurance Corporation, answers a question during a hearing held by the House Financial Institutions and Consumer Credit Subcommittee on Capitol Hill in Washington March 27, 2007.

WASHINGTON (Reuters) - While there may be some bank failures among smaller and mid-sized institutions, it is not likely to happen to any of the nation's bigger institutions, Federal Deposit Insurance Chairman Sheila Bair said on Thursday.

"I'm trying not to make predictions, there are just a lot of uncertainties out there so we are trying to prepare for all contingencies," Bair told the Senate Banking Committee in answering questions after testifying before the panel.

"In terms of the very large institutions failing, I don't see that happening. We would be surprised if that happened, but we feel like we have to prepare for all contingencies."

Bair said that in terms of risk exposure, those institutions who had monoline business models and were heavily involved in nontraditional subprime mortgage lending are of concern.

"We went 2.5 years without bank failures and we had three last year, four this year. The number will go up. I think we've been working very hard to prepare to staff that," she said.

(Reporting By Joanne Morrison; Editing by James Dalgleish)