2 American Banks Have Failed Since Coronavirus Started Spreading in the US
The New York Fed and the Federal Reserve have also expressed concern over financial stability as the spread of the virus grew. Similar to the fallout from the 2009 Global Financial Crisis, the decline in the oil prices could act as a double whammy on many developing economies, according to the IMF. Lower oil prices could actually help strengthen the currency, in particular emerging economies such as India, China and Brazil, the IMF said in a report released Tuesday. After this Corona Virus outbreak banking authoritie of USA has shutdown two banks, banks were in West Virginia and State of Nebraska. And both of these places have lock down and order to stay at home.
The latest bank to fail in the U.S. was a small bank in West Virginia called The First State Bank. It was closed on Friday by the state’s Division of Financial Institutions, according to the Federal Deposit Insurance Corporation (FDIC), an independent agency of the U.S. government that aims to protect the funds depositors place in banks and savings associations. The agency explained:
The First State Bank began operating without sufficient capital assets for its needs in 2007, at which time it passed the capital capacity test with a savings ratio of 1.48 percent. In 2009, after its subsequent financial difficulties, the bank commenced a capital plan to increase its capital assets to 4.0 percent of its total liabilities. Capital ratios are required to increase as amounts of capital increase to achieve adequate liquidity.
The First State Bank has experienced longstanding capital and asset quality issues, operating with financial difficulties since 2015. The bank’s December 31, 2019 financial reports indicated capital levels were too low to allow continued operations under federal and state law.
The First State's failure has forced the institution to fail and has caused significant financial hardships to current and former First State employees and other dependents of those employees. The FDIC is committed to the FDIC's mission of preventing financial crises and improving the quality of life for Americans and their communities. Although this is a difficult and challenging time for all involved, this is also an opportunity to not only move First State Bank forward, but to prevent other financial institutions and organizations from hurting American families.