U.S. Bank Failures Top 100 For Year

For the first time since 1992, federal regulators have closed over 100 banks across the United States, a sign that the financial crisis is not yet over for financial institutions that have suffered heavy losses from the weakness of the real estate market. Seven banks were closed just yesterday, which brings this year’s total to 106.

While the situation is far from reaching 1992’s levels of bank closures, which topped 179 as the result of a savings-and-loan crisis, the fact that 106 banks have been closed spells a lot of trouble for the employees of the banks and the communities which the banks served. However, analysts stand by the fact that closing down failed banks is an important step in getting the economy back on its feet.

The financial crisis seems to have created a situation where smaller banks cannot win, as a surge of bad loans has caused many banks to lend less money and to try to find other ways to raise and maintain capital. However, banks that refuse to lend create trouble for small businesses and other institutions that rely on credit to operate.

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