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Regulators shut down small banks in Florida, Michigan, Wisconsin and California, increasing to 18 the number of bank failures this year. The weak economy and bad debt brought down 157 banks in 2010.
The FDIC. seized the following banks: Sunshine State Community Bank of Port Orange, Fla; Peoples State Bank, based in Hamtramck, Mich.; Badger State Bank of Cassville, Wis.; and Canyon National Bank, based in Palm Springs, Calif..
Georgia and Illinois too have seen large numbers of bank failures.
The 157 bank closures last year topped the 140 in 2009. It was the most in a year since the savings-and-loan crisis two decades ago.
The 2009 failures cost the insurance fund about $36 billion. The failures last year cost around $21 billion, a lower price tag because the banks that failed in 2010 were smaller on average. Twenty-five banks failed in 2008, the year the financial crisis struck with force; only three succumbed in 2007.
The growing number of bank failures has pulled billions of dollars out of the deposit insurance fund. It fell into the red in 2009, and its deficit stood at $8 billion as of Sept. 30.
The number of banks on the FDIC's confidential problem list rose to 860 in the third quarter of last year from 829 three months earlier. The 860 troubled banks is the highest number since 1993, during the savings and loan crisis.
Depositors' money,insured up to $250000 per account is not at risk, with the FDIC backed by the government. That insurance cap was made permanent in the financial overhaul law enacted in July. The govt. backs this with mostly faux money thus creating inflation. Also they have ten years to reimburse consumers suffering losses.
This bears watching in the coming months.
Slàinte,
Patch
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Bank Failures Continue
