President Barack Obama warned Monday that more banks are likely to fail, despite efforts by the government to keep the nation's money-lending institutions afloat. The best efforts of the government through the $700 billion financial rescue package may not be enough to counteract mismanagement in some banks, Obama said.
In an interview airing Monday on NBC's TODAY show, Obama warned that some U.S. banks are in "very vulnerable positions." Risky lending practices during the subprime mortgage boom and the resulting rash of defaults revealed many banks were overextended, sparking bank failures across the country and a credit crisis.
Banks have likely "not fully acknowledged all the losses that they're going to experience," Obama said in the interview, was conducted by TODAY anchor Matt Lauer Sunday at the White House. "Some banks won't make it," Obama added.
However, for the vast majority of Americans there is no worry about their deposits as long as they are insured by the Federal Deposit Insurance Corporation, Obama said. In the meantime, the toxic assets weighing down the banks will have to be removed, he said.
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