Problem Banks Highest since 1992

As reported in the blog Calculated risk(Unoffical Problem Bank List) problem banks as reported by the FDIC are at their highest levels since 1992. The important question is of course, is this a problem?

From my perspective, no, but it's something that should be watched closely.

The reason for my opinion is that in the years 1990-1992, both the number of problem banks and the amount of assets they held were significantly higher. (FDIC Historical Trends) We all know how the economy did between 92-2000. Also, in 2007, the number and assets of problem banks were very low, and we all know how 2008 turned out.

The bottom line is that problems occur when we don't KNOW how many banks are really in trouble, and it seems at this point that the FDIC has a good handle on it.

I thought a more significant piece of information was the trend of the number of FDIC employees. The number of employees steadily decreased from 1991 to 2006/2007 and is back on the rise. The question is, are they still significantly understaffed, and do they have the manpower to identify problems before they surface to everyone's surprise.