The United States saw only five bank closures in the entire 2007 while the year 2008 saw 25 bank closures due to systemic issues. And the year 2009 promises to be a bigger disaster for the US banking sector, because as of last week end 40 banks have been closed by US Bank Regulators who are expecting further closures to happen in the coming months.
As per independent experts the US banking industry is bound to see at least 70 to 80 bank closures this year due to increasing defaults by corporates and also individuals. It is important to note that the US exports have crashed in the last one year , and the jobless rate has also climbed up sharply due to many factory closures. All these have forced people to go for bankruptcy which have resulted in bad debts pileup at the banks.
The long term solution for ensuring a strong banking system lies in the restoration of jobs for the millions of people who have lost their jobs in the last two years.
US sees 40 bank closures so far in 2009
June - 15 - 2009 - Monday
