Failed American banks go out of business this month
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