26 Oct 2009

More than 100 US banks fail this year

7:23 pm on 26 October 2009

The number of US bank failures this year has topped 100 after US federal regulators shut down three small Florida banks.

More US banks have now failed this year than in any year since 1992, the BBC reports.

Bank failures have cost the Federal Deposit Insurance Corporation (FDIC) fund that insures deposits an estimated $US25 billion this year.

Savers' money is not in danger, as the FDIC, which is backed by the US government, insures deposits at failed banks for up to $US250,000 for each account.

Many of the banks that have failed have been small community insitutions which were badly hit when loans to individuals and small businesses were not repaid after the onset of the crisis.

The number of closures is expected to rise as banks continue to suffer from the bad loans that precipitated the financial crisis.