Bank Failures | featured news

Federal regulators closed Bay National Bank of Baltimore, Md., the 87th U.S. bank to fail this year.

The Federal Deposit Insurance Corp. said state regulators closed Access Bank of Champlin, Minn., and the Bank of Bonifay in Bonifay, Fla., bringing to 66 the number of U.S. banks that have failed this year.

Other Bear Stearns executives also contend during a federal hearing that they closely monitored the firm's risk and tried to reduce exposure but that ultimately a rumor-fed run caused the downfall. One questioner calls their testimony a 'pathetic mythology.'

Former executives at Bear Stearns Cos.

Lehman Brothers' European administrator said it has gained control of $48.6 billion of securities and cash and returned $14.3 billion of assets to clients in the 18 months since the U.S. investment bank collapsed.

Four U.S. banks were seized Friday by state regulators, two in Georgia, one in Florida and one in Arizona, bringing the total number of bank failures to 41 in 2010.

The closures of Statewide Bank in Louisiana and Florida's Old Southern Bank brought the number of bank failures this year to 30, according to the Federal Deposit Insurance Corp.

Failings by Lehman executives and its auditor led to the collapse of the bank which unleashed the worst of the financial crisis, according to a report by a U.S. bankruptcy court-appointed examiner.

The one man Berkshire Hathaway Risk Committee and Chief Risk Officer, 79 year old Warren Buffett, says that directors of major banks are "derelict" if they don't "insist that [their] CEO bear full responsibility for risk control. If he's incapable of handling that job, he should look for other employment. And if he fails at it -- with the government thereupon required to step in with funds or guarantees -- the financial consequences for him and the board should be severe."

Federal Insurance Deposit Corporation officials said that banks that run the risk of collapse rose to 702 at the end of 2009 and said they expected the industry to remain under stress.

Banks in six U.S. states were closed Friday, bringing the total number of failed banks this year to 140, at a cost of over $1 billion to the Federal Deposit Insurance Corporation.