Reports are that the Federal Deposit Insurance Corporation is preparing for a fresh wave of bank failures which might end up costing the agency over a billion dollars. Also, it would put further strain on the group's finances.

With bank closures running at their highest level in almost 20 long years, the FDIC is now racing to keep up with rapidly rising losses to its insurance funds, which safeguards the savers' deposits.

On Tuesday, the group announced that it had now placed a total of 702 lenders on its list of "problem" banks, which is the highest number recorded since 1993.

Officials of FDIC, however, have stressed that the fund has "ample" resources to cope with the expected losses.

"We think that we have the cash we need”, said Sheila C. Bair, the FDIC Chairwoman, while stressing that it was highly unlikely that the FDIC would have to turn to its emergency credit line with the Treasury Department. The move, although, was not completely ruled out.