US witnesses 8 bank failures every month; 64 collapse this year

NEW YORK: Reflecting the uncertain economic conditions in the world's largest economy, as many as eight US banks on an average are going out of business every month.

A whopping 64 American banks have closed down so far this year, translating into an average of eight closures every month, according to official data.

This month alone has seen the shutting down of three banks, after 13 entities went belly up in July.

The Federal Deposit Insurance Corporation (FDIC), which insures deposits of around 8,000 American banks, said three entities - The First National Bank of Olathe, Bank of Whitman and Bank of Shorewood-- were closed down in August.

Closure of these three banks would cost the Federal agency as much as USD 277 million.

The US, which was recently stripped of its coveted 'AAA' rating by S&P, has been grappling with banking sector woes since the financial meltdown in 2008.

A staggering 157 banks failed last year, which is the highest in two decades.

Last year 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 count of bank collapses in 2010, was much higher than 140 failures witnessed in 2009.

Persistently high unemployment levels coupled with sluggish economic recovery are hurting the businesses of small and medium American banks, especially with rising defaults.