69th bank failure in the US for 2009

The US Federal Deposit Insurance Corporation closed the 69th bank of 2009 recently. The rate of closures has increased recently, leading some analysts to believe that well over 100 banks could be closed this year.

The Savings and Loan crisis of the 1980s in the US started at about the same pace, with 100 closures per year. However, the number of closures increased to a peak of 534 in 1989 – fully 9 years after the start of the uptick in closures in 1980.

The South African banking environment is different – very much fewer banks and arguably tighter regulation give the lack of deposit insurance. However, the pain that US banks are feeling informs views that our banking sector still has pain to live through before turning around.

Published by David Kirk

The opinions expressed on this site are those of the author and other commenters and are not necessarily those of his employer or any other organisation. David Kirk runs Milliman’s actuarial consulting practice in Africa. He is an actuary and is the creator of New Business Margin on Revenue. He specialises in risk and capital management, regulatory change and insurance strategy . He also has extensive experience in embedded value reporting, insurance-related IFRS and share option valuation.

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