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Four US banks bite the dust in `10; three fail in one day

Last Updated: Sunday, January 17, 2010 - 12:32

New York: Three American banks closed businesses last week even as the US economy is slowly showing signs of revival.

The latest entities to go belly up were Barnes Banking Company, St Stephen State Bank and Town Community Bank & Trust. All of them closed down on January 15.

With this, the total number of bank failures in 2010 has risen to four.

The Federal Deposit Insurance Corporation (FDIC), which insures deposits at over 8,000 US banks, has estimated that the three failures last week would cost the agency about USD 296.3 million.

Among the three, the collapse of Barnes Banking Company would cost the FDIC more than USD 271 million.

Last week, the authorities seized Washington-based Horizon Bank which had assets worth USD 1.3 billion.

Battered by the financial crisis, the US has seen staggering bank failures and as many as 140 lenders collapsed in 2009 -- the highest in 18 years.

Small and medium banks were the most hit, since high unemployment rate has resulted in rising defaults.

As per the official data, 159 banks have bit the dust since the investment banking major Lehman Brothers went bankrupt in September 2008.
Indicating that economy is coming out of its worst phase, the unemployment rate remained at ten per cent in December 2009.

In the third quarter of 2009, the American economy grew 2.2 percent.


First Published: Sunday, January 17, 2010 - 12:32

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