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US banking sector actually loses $32.1 billion in 4th quarter

WASHINGTON, (Xinhua) -- The US banking sector lost a combined 32.1 billion dollars in the final three months of 2008, worse than the 26.2 billion dollars originally reported last month, the Federal Deposit Insurance Corp. (FDIC) reported yesterday.

The fourth quarter of last year marked the first time since 1990 that the nation's federally insured banks and thrifts lost money collectively.

As a result of the huge fourth-quarter loss, the banking sector 's net income for all of last year had been lowered significantly to 10.2 billion dollars from 16.1 billion initially estimated, said the FDIC, an independent agency of the federal government and one of the banking industry's regulators.

In late 2008, rising losses on loans and eroding values of assets bit into revenue of US banks and thrifts, causing them to post the first quarterly deficit in 18 years.

"A few very large losses were reported during the quarter -- four institutions accounted for half of the total industry loss -- but earnings problems were widespread," the FDIC said.

"One out of every three institutions reported a net loss in the fourth quarter," it said. "Only 36 percent of institutions reported year-over-year increases in quarterly earnings."

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Created in 1933 in response to the thousands of bank failure that occurred in the 1920s and early 1930s, the FDIC preserves and promotes public confidence in the US financial system by insuring deposits in banks and thrift institutions.

The agency insures deposits only. It does not insure securities, mutual funds or similar types of investments that banks and thrift institutions may offer.

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