Source:PTI, Apr 25, 2010, 02.04pm IST
NEW YORK: The American banking industry continues to be shaky, with nearly 15 banks on an average biting the dust every month.
Notwithstanding healthy economic growth and rebound of Wall Street majors, a staggering 57 banks have been shut down so far this year and seven of them collapsed last Friday.
As many as 15 entities, most of them small and medium banks, have gone out of business in the last two weeks. So far this month, 16 banks have gone bust.
The failure of the seven banks last Friday is expected to cost the Federal Deposit Insurance Corporation (FDIC) as much as $973.9 million.
FDIC is the federal agency which insures deposits at over 8,000 American banks.
The latest ones to go belly up are New Century Bank, Broadway Bank, Wheatland Bank, Peotone Bank and Trust Company, Citizens Bank and Trust Company of Chicago, Lincoln Park Savings Bank and Amcore Bank, National Association.
The number of failures are expected to climb till the labour market situation becomes more steady.
Despite a quarterly economic growth of over five per cent and improving performance of Wall Street firms, small and medium banks continues to be hit by defaults due to high rate of unemployment.
Currently, the jobless rate is over nine per cent. Last month, 19 banks went bust while the count of failures touched seven in February. The authorities closed down shut down 15 banks in January.
A whopping 211 entities have collapsed since the bankruptcy of Lehman Brothers in September 2008.
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