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Three US banks fail this year

Three US banks fail this year
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First Published: Sun, Jan 25 2009. 11 16 AM IST
Updated: Sun, Jan 25 2009. 11 16 AM IST
New York: As the financial woes continue to mount in the world’s largest economy, three US banks have already have collapsed so far in 2009.
The 1st Centennial Bank, Redlands is the latest entity which was closed down on 23 January taking the tally of failed banks to 18 since September last year, when the credit turmoil turned acute.
On 16 January, Bank of Clark County, Vancouver and National Bank of Commerce, Berkeley had gone belly up.
Last year alone, the US witnessed the failure of 25 banks -- an average of two entities going under each month. Ironically, official data shows that in the last eight years (2000-08), 52 banks have collapsed.
The Federal Deposit Insurance Corporation, an independent agency, often appointed as receiver of failed banks on Friday, said it has closed 1st Centennial Bank.
A major chunk of the bank failures happened in the ongoing financial turmoil, which turned severe with the collapse of Lehman Brothers in September 2007.
Meanwhile, among the 17 banks which had failed since September, the prominent one was Washington Mutual better known as WaMu, US’ largest savings and loan entity. It was later acquired by JPMorgan for nearly $2 billion.
The ones that failed have been mostly small and regional banks, primarily due to the falling housing market.
Prior to 2008, the largest number of bank failures took place in 2002, when 11 entities went belly up.
Even as the federal government under former President George W. Bush pumped in billions of dollars including stake purchases in prominent banks, the country’s financial system continues to reel under credit crisis.
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First Published: Sun, Jan 25 2009. 11 16 AM IST