No US bank failures for a week

Has happened for the 1st time in over 3 months

For the first time in more than three months, a week has passed without any US bank failure. Ravaged by the financial meltdown, the count of bank collapses were on the rise, with an average of nearly ten banks going out of business every month in 2009.

Spurring hopes that signs of stabilisation are on the horizon, no bank failures were reported for the week ended October 9 as per data available with the Federal Deposit Insurance Corporation (FDIC).

The Federal agency, which insures deposits of over 8,000 American banks, is also often appointed as the caretaker of failed entities. Since June 19 this year, at least one bank has gone belly up every week and so far this year, a staggering 98 entities have been shut down.

The total collapses this year is about four times that of 2008, when just 25 banks bite the dust. A whopping 61 banks have gone out of business since June 19 and out of them, seven entities each were shut down on July 2 and 24.

Five banks each were closed down for the weeks ended September 4, August 14 and July 31.

According to the FDIC, the count of problem banks, which are at the risk of failing, have jumped to 416 in the second quarter of 2009. Recently, the FDIC proposed banks to pre-pay fees, which would bolster the agency’ insurance fund by $5 billion,, as the agency grapples with soaring bank failures.

Small and medium banks are facing the worst impact of the financial crisis, due to higher defaults in the wake of rising unemployment. Among the ones which shut shop in the last three months include Vantus Bank, InBank, Bradford Bank, ebank, Community Bank of Nevada, Guaranty Bank and First Bank of Kansas City.