State banks are bust (8)
I believe the answer is:
nebraska
'state' is the definition.
(I know that Nebraska is a state)
'banks are bust' is the wordplay.
'bust' indicates an anagram.
'banks'+'are'='banksare'
'banksare' with letters rearranged gives 'NEBRASKA'.
(Other definitions for nebraska that I've seen before include "Wading bird" , "location of Lincoln" , "Cornhusker State" , "State of central US" , "American state, capital Lincoln" .)