More Acquisitions, Failures In Store For US Banks

MADLEN READ

NEW YORK (AP) — The U.S. government says it won't let any of its 19 largest banks fail. That doesn't mean they'll all be around in a couple years.

This week's stress tests showed that while many big banks need more capital, regulators aren't declaring them insolvent. But that won't necessarily stop the turnover in bank ownership around the country. As the economy struggles to stabilize this year, customers and investors can expect more acquisitions, more failures, and a growing gap between the weak banks and the strong.

"This is when the weak fall by the wayside," said Bert Ely, an independent banking consultant. "We're going to see consolidation. That's inevitable." ...