Ex- FDIC Chairman Bill Isaac said that banks in the US will continue to crash at a steady rate over the next two years which not necessarily means a bad thing for the economy, reported CNBC. Isaac told that there remains a large amount of contagion in the system that needs to be removed.

"It's cleanup time," he said during a live interview. "For the next couple of years we will continue to have a steady flow of banking failures. I'm not expecting anything we can't handle or extraordinary in terms of size, but we will see a steady diet of bank failures over the next two years."

In fact, he said getting banks to the point where they are seized by the FDIC is a critical step to making sure the system functions properly.

"I would say the bank failures are not necessarily a bad thing,"" Isaac said. "When a bank fails we've got a deeply troubled institution that cannot lend money. If we go in and resolve the failure, the cleanup of that situation ... will enable the institution to get on with lending. The FDIC cleans out the problem loans. So it really does cleanse the system and help us get lending started again, which is what we need."