What is the FDIC Watch List?
The Federal Deposit Insurance Corporation (FDIC) watch list is a list of FDIC-insured banks which appear to be struggling. When banks land on the watch list, the FDIC monitors them closely, with the goal of preventing failure and being ready to swing into action if necessary. The contents of the FDIC watch list are not available to the public. Like other agencies in the financial industry, the FDIC has a complex rating system which it uses to assess the health of banks. The ratings consider issues like liquidity, total funds on deposit, bank policies, and so forth, with the goal of determining how sound and safe a bank is. Using this rating system, the FDIC can compile a list of banks which appear to be tipping dangerously close to failure. The contents of the watch list are kept private due to concerns about a run on the bank. If the FDIC watch list were to become public, the concern is that depositors and investors would descend on the bank to demand their funds on deposit, and this
The Federal Deposit Insurance Corporation (FDIC) watch list is a list of FDIC-insured banks which appear to be struggling. When banks land on the watch list, the FDIC monitors them closely, with the goal of preventing failure and being ready to swing into action if necessary. The contents of the FDIC watch list are not available to the public. Like other agencies in the financial industry, the FDIC has a complex rating system which it uses to assess the health of banks. The ratings consider issues like liquidity, total funds on deposit, bank policies, and so forth, with the goal of determining how sound and safe a bank is. Using this rating system, the FDIC can compile a list of banks which appear to be tipping dangerously close to failure.
