FDIC 'looking to recoup $1bn from executives of failed banks'

8 October 2010

The Federal Deposit Insurance Corp (FDIC) is preparing to launch around 50 lawsuits against the directors and officers of failed banks in the US.

It is hoping to recoup more than $1 billion in losses caused by the financial crisis after closed sessions of the FDIC board authorized the lawsuits to be pursued, reports Bloomberg.

The FDIC is conducting settlement talks with the affected executives before taking any court action against them.

Richard Osterman, the FDIC's acting general counsel, said: "It's in both our interest and theirs to try and settle this matter before it gets into the court and we get into expensive litigation."

But he noted that the body is prepared to go into court "tomorrow" if it becomes necessary.

Earlier this month, it was reported that the FDIC is looking to sell off around $1.1 billion worth of commercial and residential property loans it has seized from failed banks.

By Claire Archer

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