More bank failures, global edition

FDIC chief Sheila Bair recently predicted more US bank failures in 2010 than in 2009. Russia is apparently predicting the same. Gennady Melikyan, the central bank’s first deputy chairman, said: “This year we revoked the licenses of 44 banks – next year I think that number will be significantly greater.” He added that an increase in bank defaults had already been noted in countries that were hit by the financial crisis earlier than Russia. Nigeria is already entering a second phase of bank bail-outs.

The Bank of England has been more cagey. In its financial stability report, the bank refers to the measures required, without making explicit the risk:

“Many banks in the United Kingdom and internationally need to strengthen their balance sheets further by reducing leverage by planning to extend the maturity of their funding and by repaying public sector support. While conditions remain favourable and profits are buoyant banks should take the opportunity to strengthen balance sheets, including by limiting distributions.”

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