Failed Amer­i­can banks go out of busi­ness this month

The Pak Banker - - Front Page -

NEW YORK: The num­ber of Amer­i­can banks that went out of busi­ness in 2010 has surged to a whop­ping 149 en­ti­ties so far this year. The count of col­lapses, which has al­ready sur­passed last year's to­tal of 140, is ex­pected to rise till the US labour mar­ket sit­u­a­tion sta­bilises.

As per the lat­est of­fi­cial data, two banks were shut down on De­cem­ber 10, push­ing this year's fail­ures to 149. Ac­cord­ing to the Fed­eral De­posit In­surance Cor­po­ra­tion (FDIC), Para­mount Bank and Earth­star Bank were closed down last Fri­day. The fed­eral agency, which in­sures de­posits at over 8,000 US banks, ex­pects these col­lapses to cost over USD 113 mil­lion.

In the last two months, 22 banks went belly-up. The max­i­mum num­ber of fail­ures this year oc­curred in April, when 23 en­ti­ties went out of busi­ness.

Of­fi­cial es­ti­mates show that the num­ber of prob­lem banks --those at risk of fail­ing --climbed to 860 in the three months ended Septem­ber from 829 in the June quar­ter.

Small and medium banks are bear­ing the brunt of high un­em­ploy­ment lev­els, which has re­sulted in in­creased de­faults. Even though the US econ­omy clocked 2.5 per cent growth in the Septem­ber quar­ter, the job­less rate hov­ers around 10 per cent. The US Fed­eral Re­serve re­cently hinted that it could con­sider more steps to boost the slug­gish econ­omy af­ter an­nounc­ing plans in early Novem­ber to buy USD 600 bil­lion worth of govern­ment se­cu­ri­ties by June next year. -PB News

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