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Rescue deal for two US lenders
28 Jul 2008The US banking crisis is deepening, with Washington forced to organise a rescue deal for two insolvent mortgage lenders in Nevada and California.
The closure of First National Bank of Nevada and First Heritage Bank in California comes just a fortnight after the collapse of big California mortgage lender IndyMac and amid warnings that up to 300 US banks could go to the wall.
The latest casualties of the subprime meltdown had combined assets of about $3.6 billion (£1.8 billion).
While those are not large in the context of the wider crisis, their rescue illustrates the problem facing regulators.
The bulk of the two banks' businesses was sold on to Mutual of Omaha Bank but the Federal Deposit Insurance Corporation (FDIC) that underwrites deposits was forced to pick up the remaining $860 million of troubled assets.
The FDIC now has 90 banks on its watchlist - up from 76 late last year. California and Nevada have been the hardest hit in the housing slump.
