It seems unlikely at this point that a major Wall Street firm will collapse. Lehman Brothers has been the target of a lot of rumors, but most think a Bear Stearns-like implosion is a remote possibility. But what about smaller banks? Loan loss reserves are rising, and the FDIC is raising the possibility of a spate of failures. Already, three have failed this year, compared with three last year and zero in 2006. The Financial Times notes that the number of designated "problem" banks rose from 76 to 90 in the first quarter. We're not looking at a savings and loan-like meltdown, but do not be surprised by some failures ahead.  

For more:
- here's the Financial Times article

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