Indicating that American banking sector crisis is far from over, a staggering 118 banks

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have collapsed so far this year.

Nearly 15 US banks on an average are biting the dust every month, with small and medium entities being the worst hit. The spiralling count of failures come in the backdrop of high unemployment levels, which is resulting in increased defaults.

Eight banks were shut down by the authorities on Friday, pushing the total number of failures in August to ten.

According to the Federal Deposit Insurance Corporation (FDIC), which insures deposits at over 8,000 American banks, collapse of these eight entities would cost USD 473.5 million.

The banks that failed were ShoreBank, Pacific State Bank, Imperial Savings and Loan Association, Independent National Bank, Community National Bank at Bartow, Los Padres Bank, Sonoma Valley Bank and Butte Community Bank.

In July, 22 banks were shut down. The highest number of collapses this year happened in April when 23 entities bite the dust.

The world's largest economy grappled with 140 bank failures last year but the total count in 2010 is likely to be higher than that.

As per the FDIC, the number of 'problem' banks -- those at risk of failing -- climbed to 775, the highest in nearly 17 years, in the first three months of 2010. The count stood at just 702 at the end of 2009.

The US jobless rate stood at 9.5 per cent in July while the national economy is showing signs of slowing down.