Wall Street Journal has a story from a reporter who accompanied officials from the FDIC when they went to shut down a bank. The article is short on information, but the subject is so important that I recommend reading it anyway. A bank near you is going to fail soon, and it is worth knowing how the system operates. Sometimes you can learn things even from fluff articles. Take this qoute from the article for example….

It isn’t easy for 75 federal officials and contractors to slip into a small town undetected and liquidate an 89-year-old bank without anyone knowing. But that’s what just happened in this old railroad town, population 3,200. It’s a scene that’s likely to repeat itself across the country as banks struggle through a painful credit cycle, overwhelmed by troubled mortgages and soured construction loans.

First Integrity, which had two branches and $55 million in assets, was the fourth FDIC-insured bank to fail this year.

Now think about this. If it takes 75 people to handle the shut down of one teeny bank, how is the FDIC going to handle the all bank failures coming down the pike?

To be fair, the FDIC is aware of this problem and they are trying to gear up. Still, you have to wonder if they will have enough people.

h/t Calculated Risk