Seven banks in USA fail, pushing 2009 tally to 52
Seven banks were shut down by authorities Thursday, pushing the tally of failed banks for 2009 to 52, more than doubling the failures in 2008.
Six regional banks in Illinois and one in Texas closed their doors, according to the Federal Deposit Insurance Corporation.
The rash of Illinois failures are interlinked: All six banks were controlled by one family and followed a similar business model that "created concentrated exposure in each institution," according to the FDIC.
The agency said that the six failures stemmed from the banks` investments in collateralized debt obligations and other loan losses.
Twelve banks in Illinois have failed this year. Thursday`s failure in Texas was the first for the state in 2009.
Last year, 25 banks failed in the United States.
Local banks have been hard hit as plummeting home values devalued mortgage-backed assets and rising unemployment rates caused an increasing number of consumers to default on their loans.
Larger financial institutions have been helped with government bailouts, but smaller regional banks continue to struggle.
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