Bank failure

Notable acquisitions of failed banks

The following table lists significant acquisitions of failed banks, illustrating the scale and impact of major bank failures. It does not include partial purchases by governments to prevent bank or banking system failures, such as government intervention during the subprime mortgage crisis:

Bank failures in the U.S.

In the U.S., deposits in savings and checking accounts are backed by the FDIC. As of 1933, each account owner is insured up to $250,000 in the event of a bank failure. When a bank fails, in addition to insuring the deposits, the FDIC acts as the receiver of the failed bank, taking control of the bank's assets and deciding how to settle its debts. The number of bank failures has been tracked and published by the FDIC since 1934, and has decreased after a peak in 2010 due to the 2008 financial crisis.

Since the year 2000, over 500 banks have failed. The 2010s saw the most bank failures in recent memory, with 367 banks collapsing over that decade. However, while the 2010s saw the most banks fail, it wasn't the worst decade in terms of the value of the banks going under. The 2000s saw 192 banks go under with $533 billion in assets ($749 billion in 2023 dollars) compared to the $273 billion ($354 billion) lost in the 2010s.

No advance notice is given to the public when a bank fails. Under ideal circumstances, a bank failure can occur without customers losing access to their funds at any point. For example, in the 2008 failure of Washington Mutual the FDIC was able to broker a deal in which JP Morgan Chase bought the assets of Washington Mutual for $1.9 billion. Existing customers were immediately turned into JP Morgan Chase customers, without disruption in their ability to use their ATM cards or do banking at branches. Such policies are designed to discourage bank runs that might cause economic damage on a wider scale.

Global failure

The failure of a bank is relevant not only to the country in which it is headquartered, but for all other nations with which it conducts business. This dynamic was highlighted during the 2008 financial crisis, when the failures of major bulge bracket investment banks affected local economies globally. This interconnectedness was manifested not on a high level, with respect to deals negotiated between major companies from different parts of the world, but also to the global nature of any one company's makeup. Outsourcing is a key example of this makeup; as major banks such as Lehman Brothers and Bear Stearns failed, the employees from countries other than the United States suffered in turn. A 2015 analysis by the Bank of England found greater interconnectedness between banks has led to a greater transmission of stresses during a time of recession.

References

References

1. "When a Bank Fails – Facts for Depositors, Creditors, and Borrowers". [[Federal Deposit Insurance Corporation]].
2. Correia, Sergio. (2025). "Failing Banks". The Quarterly Journal of Economics.
3. (August 26, 2002). "The Value of Banking Relationships During a Financial Crisis: Evidence from Failures of Japanese Banks".
4. (Spring 1996). "Bank Failures, Systemic Risk, and Bank Regulation". [[The Cato Institute]].
5. "RBS launches $43B bid for NatWest – Nov. 29, 1999".
6. (October 27, 2003). "Bank of America to acquire FleetBoston for $47B – Oct. 27, 2003". [[CNN]].
7. (January 15, 2004). "J.P. Morgan to buy Bank One for $58 billion – Jan. 15, 2004". [[CNN]].
8. (January 1, 2006). "Bank Of America Acquires MBNA". [[CBS News]].
9. (May 20, 2007). "UniCredit agrees to buy Capitalia in $29 bln deal". Reuters.
10. Wilchins, Dan. (September 28, 2007). "ING Bank to acquire NetBank deposits". Reuters.
11. Schwartz, Nelson D.. (2008-10-03). "Dutch government nationalizes Fortis' operations in the Netherlands". The New York Times.
12. (2015-05-22). "Het einde voor ABN Amro als staatsbank is in zicht".
13. (March 20, 2009). "OneWest completes acquisition of Indymac Assets". Reuters.
14. "Deposit Insurance FAQs". [[Federal Deposit Insurance Corporation]].
15. "FDIC {{!}} Failed Bank List". [[Federal Deposit Insurance Corporation]].
16. Laycock, Richard. (May 11, 2023). "List of bank failures: 2000 to 2023 {{!}} Finder".
17. (September 26, 2008). "JPMorgan buys WaMu". [[CNN]].
18. (September 25, 2008). "OTS 08-046 – Washington Mutual Acquired by JPMorgan Chase". [[Office of Thrift Supervision]].
19. (2015). "Banking sector interconnectedness: what is it, how can we measure it and why does it matter?".