53 US banks going belly up in seven months

NEW YORK: In a sign that the US economic recession is still far from over, the Bank of Wyoming shut shop two days ago, taking the tally of failed banks in the last seven months to 53.

Last week alone, authorities closed down seven banks in a single day. With the lastest closure, the number of banks that have failed in July this year goes up to 9.

Smaller and regional banks are the worst hit in the ongoing financial turmoil and the bankruptcy list is expected to grow longer in the coming weeks.

Going by the data available with the Federal Deposit Insurance Corporation (FDIC), the government body that often acts as caretaker for failed banks, Bank of Wyoming had assets worth USD 70 million and deposits to the tune of USD 67 million as on June 30, 2009.

Recently, the FDIC said the number of "problem banks" in the country have risen to a 15-year-high of 305 in the first quarter of 2009 against 252 last quarter. Already, the number of failed banks this calender has already crossed last year's total of 25.

Ten banks were closed in February this year, the highest for any month this calender. Four banks each shut down on February 13 and April 24, while three banks each collapsed on January 30, February 6 and March 20.

Among the banks that failed in recent weeks include Strategic Capital Bank, Rock River Bank, Bank of Lincolnwood, BankUnited, Southern Community Bank, First National Bank of Anthony and Elizabeth State Bank.

With the Bank of Wyoming collapsing, the number of financial institutions, which have failed since January last year has risen to 78.

The good news, however, is that the International Monetary Fund has revised its earlier projection of a negative 2.8 per cent growth to a contraction by 2.6 per cent this year.