New York: Six more US banks have been shut
down, pushing the total number of failures this year to 130 or
an average of nearly 11 entities every month.
Mirroring the country's shaky financial situation, the
count of collapses this year is more than five-fold that in
2008, when just 25 banks went out of business.
Moreover, the bank failures so far in 2009 is the highest
since 1992, when a staggering 181 entities folded up due to
the savings and loan crisis.
The Federal Deposit Insurance Corporation (FDIC), which
often acts as the caretaker of failed entities, shuttered six
banks on December 4. They are Greater Atlantic Bank, Benchmark
Bank, AmTrust Bank, The Tattnall Bank, First Security National
Bank and The Buckhead Community Bank.
According to the FDIC, collapse of these six banks would
cost the agency as much as USD 2.38 billion.
Among them, the failure of AmTrust Bank, one of the
largest in the country, alone would cost USD 2 billion. The
entity had assets worth USD 12 billion and deposits to the
tune of USD 8 billion as on October 27, 2009.
The maximum number of collapses this year took place in
July, when 24 banks were closed down, while 20 entities bite
the dust in October.
Small and medium banks are bearing the brunt of the
financial meltdown, with higher unemployment resulting in
increased defaults.
Going by Federal government estimates, the cost of bank
failures has already gone past USD 25 billion and such
expenses are projected to touch USD 100 billion by 2013.
A whopping 145 banks have gone belly up since the
collapse of then Wall Street major Lehman Brothers, which
pushed the financial system into a tizzy.
On the other hand, there are nascent signs of recovery in
the country's labour market and the unemployment rate slipped
to ten percent in November from a 26-year-high of 10.2 percent in the previous month.
PTI
First Published: Sunday, December 06, 2009, 11:03