103 US banks collapse in under 7 months
The count of bank failures in the US has crossed the century-mark in 2010 and as many as 17 entities have folded up so far this month.india Updated: Jul 25, 2010 11:01 IST
The count of bank failures in the US has crossed the century-mark in 2010 and as many as 17 entities have folded up so far this month.
Mostly small and medium banks are bearing the brunt of the collapse, as they continue to wobble under the prolonged sluggishness in financial conditions. On an average, nearly 15 banks have bit the dust every month so far this year.
According to the Federal Deposit Insurance Corporation (FDIC), which insures deposits at over 8,000 banks, as many as 103 entities have gone out of business so far this year. In 2009, a staggering 140 banks were shut down.
On July 23 alone, authorities seized seven banks which would result in an expense of about $ 431 million for the FDIC. The seven entities that failed were Southwest USA Bank, Home Valley Bank, Sterling Bank, Williamsburg First National Bank, Thunder Bank, Crescent Bank and Trust Company and Community Security Bank.
Seventeen banks have collapsed so far this month while the count stood at just eight in June. The highest number of bank failures for any month in 2010 happened in April, when a whopping 23 entities had collapsed.
As per the FDIC, the number of 'problem' banks - those at risk of failing - climbed to 775, the highest in nearly 17 years, in the first three months of 2010. The count stood at 702 at the end of 2009.
Even as the US economy is on the recovery path, high unemployment levels are resulting in higher defaults at small and medium banks. The jobless rate touched 9.5 per cent in June.
First Published: Jul 25, 2010 10:56 IST