New York, December 06: 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