11 US banks collapse every month; 133 folded up so far
With three more American banks biting the dust, the total number of collapses in 2009 has touched 133, more than five-fold that of last year.business Updated: Dec 13, 2009 11:16 IST
With three more American banks biting the dust, the total number of collapses in 2009 has touched 133, more than five-fold that of last year.
Battered by the financial turmoil, an average of 11 banks especially the small and medium ones, are going belly up every month in the country. Last year, just 25 banks had collapsed.
The count of bank failures in 2009 is the maximum in 18 years. In the wake of the savings and loan crisis, a whopping 181 banks were shuttered in 1992.
According to the Federal Deposit Insurance Corporation (FDIC), three entities - Republic Federal Bank, Valley Capital Bank and Solutions Bank - were closed on December 11.
The failure of these banks is expected to cost FDIC - which is often appointed as the caretaker of collapsed entities - $252.1 million.
So far this month, nine entities, including AmTrust Bank have gone belly up, and the total cost of these collapses would be nearly $2.63 billion.
Ailing AmTrust Bank had assets worth $12 billion and deposits of $8 billion as on October 27, 2009.
The climbing bank failures are mainly on account of increased defaults due to high national unemployment rate.
The highest number of collapses occurred in July, when 24 banks were shut down, while 20 entities folded up in October.
Since the bankruptcy of financial services firm Lehman Brothers in September 2008, 148 US banks have vanished.
As per official estimates, the cost of bank failures is anticipated to be $100 billion by 2013.