New York: Two more US banks went belly up
last week, pushing total failures to a whopping 94 entities so
far this year in the country, even as the economy is showing
signs of recovery.
As many as 94 bank collapse have been witnessed in just
nine months, translating into an average of at least ten banks
are going belly up every month so far this year.
Besides, a staggering 109 banks have folded up in the US
since the collapse of the once-famed Wall Street firm Lehman
Brothers last September.
Two banking entities---Irwin Union Bank, FSB, Louisville,
and Irwin Union Bank and Trust Company in Columbus, were shut
down by the authorities on September 18.
Federal Deposit Insurance Corporation (FDIC), which is
often appointed as the caretaker of failed entities would
incur a total cost of about USD 2.5 billion.
As per FDIC, Irwin Union Bank and Trust Company had
total assets of USD 2.7 billion and deposits of about USD 2.1
billion as of August 31, 2009.
Meanwhile, as on August 31 Irwin Union Bank, FSB in
Louisville had assets to the tune of USD 493 million and
deposits of about USD 441 million.
Of the 109 failures after the demise of the Lehman
Brothers, 15 took place last year. So far in September 2009,
10 banks have gone belly up.
Banking failures, especially of small and medium ones,
are rising on account of higher unemployment which has
resulted in more defaults.
Presenting a gloomy scenario, the FDIC has said the count
of problem banks, which are at the risk of collapsing, have
jumped to 416 in the second quarter of 2009.
In August, a stunning 15 banks failed, while in July, a
staggering 24 entities failed, which was the maximum for any
month in 2009. Seven banks went out of business on July 2 and
Among the collapsed entities this year are the First Bank
of Kansas, InBank, Vantus Bank, Platinum Community Bank and
the First State Bank, First Coweta Bank, eBank and Community
First Published: Monday, September 21, 2009, 20:20