US sees nine bank collapses in '10; five go belly in one day | india | Hindustan Times
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US sees nine bank collapses in '10; five go belly in one day

With five more entities folding up, the total number of American bank failures has touched nine in 2010. Even though the national economy is slowly picking up, banks are still seeing increased defaults in the wake of high unemployment levels.

india Updated: Jan 24, 2010 12:11 IST

With five more entities folding up, the total number of American bank failures has touched nine in 2010.

Even though the national economy is slowly picking up, banks are still seeing increased defaults in the wake of high unemployment levels.

Rattled by the financial meltdown, a whopping 140 banks failed last year -- the maximum in 18 years.

Columbia River Bank, Evergreen Bank, Charter Bank, Bank of Leeton and Premier American Bank were shut down on January 22, according to the Federal Deposit Insurance Corporation.

The failure of the five entities would cost the FDIC, which insures deposits at over 8,000 American banks, as much as $531.7 million.

Going by the official data, as many as 164 banks have closed down, since the bankruptcy of Wall Street major Lehman Brothers in September 2008.

Small and medium banks are battered the most, as most of them are unable to grapple with rising defaults.

Meanwhile, the US government is continuing with its crackdown on the financial sector, which has been severely hit by the economic turmoil.

US President Obama has outlined a proposal for new restrictions on the size and scope of financial entities to limit their increased risk-taking ways.