May 8, 2009 / 6:28 PM / 10 years ago

US FDIC to open new office to handle bank closings

WASHINGTON, May 8 (Reuters) - The Federal Deposit Insurance Corp said on Friday it will open up an additional East Coast office to deal with failed banks.

The FDIC, which insures the deposits of U.S. banks and handles the receiverships of failed institutions, said it will open a temporary satellite office in Jacksonville, Florida, that will provide space for up to 500 staff members.

The new office reflects the expanded demands on the FDIC as bank failures continue at a strong pace following the dramatic drop in house prices and mounting credit losses in the banking sector.

So far this year, 32 banks have failed, compared with 25 bank failures in 2008 and only three in 2007.

FDIC Chairman Sheila Bair said recently that the U.S. bank system is past the crisis stage and is now in clean-up stage but said that there would still be a steady pace of bank failures.

The agency said the new office will manage receivership and liquidate assets from failed institutions primarily located in the Eastern states.

“Throughout its history, the FDIC has used these offices to keep temporary asset resolution staff closer to the concentration of failed bank assets they oversee,” the agency said in a statement.

The FDIC said it expects to move into the space in September. (Reporting by Karey Wutkowski, editing by Gerald E. McCormick)

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