NEW YORK: With five more US banks biting the dust this week, a whopping 78 entities have folded up their businesses so far this year.
Mirroring the financial woes faced by the American banking industry, an average of 15banks are going bankrupt every month.
Recently, the Federal Deposit Insurance Corporation (FDIC), which insures deposits at over 8,000 American banks warned of more failures in the coming months.
Authorities shut down five entities on May 28. They are Bank of Florida -- Southwest; Bank of Florida -- Southeast; Bank of Florida-- Tampa Bay, Sun West Bank and Granite Community Bank.
These failures are expected to cost the FDIC as much as USD 317 million.
The three Florida-based banks were owned by Bank of Florida Corporation.
In the first three months of 2010, the number of 'problem' banks climbed to 775, the highest in nearly 17 years. The same stood at just 702 at the end of 2009.
This month alone, 14 banks have gone out of business. The count of collapses are anticipated to rise in the wake of high unemployment levels, which is resulting in increased defaults at banks.
Last year, a whopping 140 banks in the US went belly up.
"There will be more failures, to be sure. The banking system still has many problems to work through and we cannot ignore the possibility of more financial market volatility," FDIC chairperson Sheila C Bair said recently.
Source: The Times of India, 30.05.10
