socialmedian: 106 Bank Failures In Perspective

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106 Bank Failures In Perspective

Source: CARPE DIEM

Oct 28, 2009

Summary

So far this year 106 banks have failed out of 8,195 FDIC-insured institutions, or slightly more than 1% of all banks. How does that compare to previous periods of financial stress and episodes of bank failures, and is there anything positive about bank failures?

The graph above displays annual bank failures (data here) from 1930 to 2009, showing the two most serious banking crises in U.S. history, the Great Depression (9,146 banks failed from 1930-1933) and the S&L Crisis (2,935 banks failed from 1980-1994). Compared to those two periods, 106 bank failures in a single year out of more than 8,000 banks in total, does appear pretty inconsequential.

The graph below shows annual bank failures since 1970 only, and puts some further perspective on the 106 bank failures this year, compared to the S&L crisis when almost 3,000 banks failed in total, and there were was an entire decade when banks were failing at a rate of more 100 per year.

Further analysis shows that the assets of the 106 failed banks in 2009 totaled $106 billion (FDIC data here), which represents only 8 ...Read the full article

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