The count of bank failures in the US has reached 125 in 2010 and as many as 7 entities have folded up so far this month. This year’s bank closures are occurring at a faster pace than in 2009 when the 100 mark was not reached until October.
Mostly small and medium banks are bearing the brunt of the collapse, as they continue to wobble under the prolonged sluggishness in financial conditions. On an average, nearly 15 banks have bit the dust every month so far this year.
According to the Federal Deposit Insurance Corporation (FDIC), which insures deposits at over 8,000 banks, as many as 125 entities have gone out of business so far this year. In 2009, a staggering 140 banks were shut down.
As per the FDIC, the number of 'problem' banks -- those at risk of failing -- climbed to 775, the highest in nearly 17 years, in the first three months of 2010. The count stood at 702 at the end of 2009.
Even as the US economy is on the recovery path, high unemployment levels are resulting in higher defaults at small and medium banks. The jobless rate touched 9.5% in June.