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US sees 84 bank failures in eight months

The number of bank failures in the US is climbing by the day with a staggering 84 entities going out of business in less than eight months.

world Updated: Aug 30, 2009 12:19 IST

The number of bank failures in the US is climbing by the day with a staggering 84 entities going out of business in less than eight months.

Reflecting the continuing financial gloom, three more entities- Affinity Bank, Mainstreet Bank and Bradford Bank went belly up last Friday.

The total count of collapses so far this year is over three-times that of 2008 when 25 banks had shut down.

The Federal Deposit Insurance Corporation (FDIC), the regulator which insures bank deposits, last week said the number of problem banks- those at the risk of failing has shot up to 416 in the June quarter.

According to the FDIC, failure of the three banks would cost the agency about $446 million.

Even as the economy is showing tentative signs of recovery, smaller banks and savings institutions are continuing to fail at a rapid pace. The trend is mainly on account of rising default in the wake of higher unemployment levels.

This month alone, 15 banks have gone out of business including the collapse of Colonial Bank, which is the biggest in 2009.

The entity had assets worth $25 billion as on June 30 and the collapse would cost the FDIC as much as $2.8 billion.

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