The show must go on: Bankruptcies continue

The Federal Deposit Insurance Corporation (FDIC) reported on the state of the banking sector. Combined revenues from U.S. banks in the second quarter of 2010 totaled $ 21.6 billion compared to $ 17.8 billion in the first quarter (+21% the quarter) by reducing. In addition, decreased volume of “problem” assets – up to $ 403 billion against $ 431 billion in the first quarter (-6.5% quarter / quarter).

But despite some improvement in the industry, the sector continues to suffer of the crisis. In particular, lending volumes continue to decline. Net loans during the second quarter decreased by 1.3% the quarter, including loans to small businesses and farms decreased by 1.8% the quarter. Total assets in troubled banks falling, but the number of banks continues to grow. For the second quarter it grew by 7% the quarter – up to 829 credit institutions. FDIC expects that in the third quarter of 2010 the number of bank failures to reach the peak. Since the beginning of this year already 118 banks went bankrupt, while last year’s total number of failed credit institutions amounted to 140. Nuriel Roubini expects that the banking sector in the U.S. this year expects to 400 bankruptcies. In my assessment, its’ number by the end of the year may reach 170 to 240.

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