| 52 US banks go belly up in 2009; 7 fail in a single day | |
| Press Trust of India / New York July 03, 2009, 17:50 IST | |
Seven more US banks have been shut down, pushing the total number of failures so far this year to 52 — more than double the collapses in 2008.
In signs of the continuing economic turmoil, seven banks were seized by the authorities on July 2, the highest for any month in 2009.
Twenty five banks went belly up in 2008 and many of them failed after the bankruptcy of Lehman Brothers last September.
According to the Federal Deposit Insurance Corporation (FDIC), which is often appointed as the caretaker of failed entities, out of the seven banks, six were based out of Illinois and one was in Texas.
The latest entities to be shut down were John Warner Bank, First State Bank of Winchester, Rock River Bank, ElizabethState Bank, First National Bank of Danville, Millenium State Bank of Texas and Founders Bank, according to the Federal Deposit Insurance Corporation.
Smaller banks are facing the brunt of the financial turmoil as higher unemployment has resulted in increasing defaults. More such entities are expected to collapse in the coming months before the nation's recession-hit economy stabilises.
In the last two weeks, the authorities have shut eight banks, with five of them collapsing on June 26. The entities which failed on that day were Mirae Bank, Metro Pacific Bank, Horizon Bank, Neighborhood Community Bank and Community Bank of West Georgia.
Four banks each were shut down on February 13 and April 24, while three banks each collapsed on January 30, February 6 and March 20.
The FDIC recently said the umber of "problem banks" in the country have risen to 15-year-high of 305 in the first quarter of 2009. The count stood at 252 in December quarter. A whopping 77 banks have collpased since January 2008.
The American economy officially slipped into recession in December 2007 and has contracted rapidly in the last few quarters. In the first three months of 2009, the US GDP shrank more than five per cent and unemployment rate touched a 26-year high of 9.5 per cent in June.
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