thanks to BUSH and sub-prime lending

20 US banks collapse in 2010 so far

PTI New York, February 21, 2010 Updated 15:24 IST

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In less than two months, 20 American banks have closed down even as the US economy is slowly coming out of the financial turmoil. As many as 15 banks failed in January, while five have gone belly up so far this month. In signs that the banking sector continues to remain shaky, four banks were shut down on February 20, according to the Federal Deposit Insurance Corporation (FDIC). The count of failures is climbing mainly on account of high unemployment rate which has resulted in increased defaults at small and medium banks. Going by the FDIC, which insures deposits at more than 8,000 banks, four entities -- Marco Community Bank, The La Coste National Bank, George Washington Savings Bank and La Jolla Bank, FSB -- collapsed last week. These four failures are expected to cost the FDIC little over $1 billion. Among them, the collapse of La Jolla Bank alone would result in expenses of $882.3 million. A staggering 174 US banks have bite the dust since the collapse of the Wall Street giant Lehman Brothers in September 2008, which had sparked one of the worst financial crises in decades. Bolstered by massive public spending and slowly stabilising financial system, the US economy is on the growth path. In the fourth quarter of 2009, the national GDP expanded 5.7 per cent, much higher than expected.

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