December 12, 2008

NEW YORK (CNNMoney.com) -- Hardly a day goes by without an announcement from a big company taking an axe to its payroll. But guess who won't be laying off people anytime soon?The Federal Deposit Insurance Corporation.Faced with what the likelihood of even more bank failures in 2009, the nation's top banking regulator has ramped up its hiring in recent weeks.Over the next three months, the agency plans to add about 125 new employees, according to a FDIC spokesman. The majority of those positions are aimed at dealing with struggling or failed institutions in Western states.

Nearly all of those workers will be headquartered out of Irvine, Calif. Last month, the FDIC announced it had signed a three-year lease on a 200,000 square-foot building there, representing its first temporary satellite office in more than a decade."[The FDIC is] fully expecting, over the course of the next 12 to 18 months, [that] there is going to be a rash of failures," said Nick Ketcha Jr., a former director of supervision at the FDIC who now serves as a managing director at the New Jersey-based financial services consulting firm FinPro.

Bank failures have climbed in recent months as the industry continues to grapple with a myriad of problems, including rising mortgage delinquencies and a deterioration in the quality of banks' credit card portfolios.Twenty-three banks have failed so far this year. The most recent collapse was First Georgia Community Bank, which was placed into receivership by the FDIC last Friday.With the economy in a full-blown recession that shows no sign of relenting, industry observers are bracing for more failures to follow as hard-hit banks try to keep up with loan losses.