US saw 13 bank failures every month in 2010; toll touches 157

Monday, 3 January 2011 00:01 - - {{hitsCtrl.values.hits}}

NEW YORK: As many as 13 US banks went out of business every month in 2010, pushing the total number of failures to nearly a two-decade high of 157 entities.

The count of bank collapses last year was much higher than 140 failures recorded in 2009, when the US economy was in the grips of a severe financial meltdown.

2010 saw the highest number of US banks biting the dust since 1992, when the savings and loan crisis had pushed a whopping 179 entities out of business.

The Federal Deposit Insurance Corporation (FDIC), which insures deposits at over 8,000 banks, has said that 157 entities were shut down last year. In April alone, 23 entities were shut down, the highest for any month in 2010.

With high unemployment levels, small and medium banks are facing with rising defaults. Going by official data, entities that failed in 2010 had total assets worth over USD 90 billion.

Reflecting the continuing financial turbulence in the world’s largest economy, 311 banks have gone belly up since the bankruptcy of then Wall Street giant Lehman Brothers on 15 September, 2008.

The fall of Lehman had worsened the financial situation and also pushed the global economy into a tizzy.

The count of problem banks — those at the risk of failure — is also on the rise. According to the FDIC, there were about 860 problem banks at the end of 30 September, 2010.