Bank failure
A bank failure occurs when a
The failure of a bank is generally considered to be of more importance than the failure of other types of business firms because of the interconnectedness and fragility of banking institutions. Research has shown that the market value of customers of the failed banks is adversely affected at the date of the failure announcements.
Notable acquisitions of failed banks
This article may require cleanup to meet Wikipedia's quality standards. The specific problem is: Some transactions should not be included here; fill out "Type" column for verification. (March 2023) |
This list does not include partial purchases by governments to prevent bank or banking system failures, such as government intervention during the subprime mortgage crisis.
Announcement date | Target | Acquirer | Transaction value (US$ billion) |
Type |
---|---|---|---|---|
1999-11-29[4] | National Westminster Bank Plc
|
Royal Bank of Scotland | 42.5 | |
2003-10-27[5] | FleetBoston Financial | Bank of America | 47 | |
2004-01-15[6] | Bank One Corporation | JPMorgan Chase | 58 | |
2006-01-01[7] | MBNA | Bank of America | 34.2 | |
2007-05-20[8] | Capitalia | UniCredit | 29.47 | |
2007-09-28[9] | NetBank | ING Group | 0.014 | |
2007-10-09 | ABN AMRO | Fortis Santander
|
77.23[dubious ] | Breakup, nationalization of some components with return to publicly traded company |
2008-02-22 | Northern Rock | Government of the United Kingdom | 41.213 | |
2008-04-01 | Bear Stearns | JPMorgan | 2.2 | |
2008-07-01 | Countrywide Financial
|
Bank of America | 4 | |
2008-07-14 | Alliance & Leicester | Santander | 1.93 | |
2008-08-31 | Dresdner Kleinwort
|
Commerzbank | 10.812 | |
2008-09-07 | Fannie Mae and Freddie Mac | Federal Housing Finance Agency | 5,000[dubious ] | Federal conservatorship with expected return to independent management |
2008-09-14 | Merrill Lynch
|
Bank of America | 44 | |
2008-09-17 | Lehman Brothers | Barclays | 1.3 | |
2008-09-18 | HBOS | Lloyds TSB
|
33.475 | |
2008-09-26 | Lehman Brothers | Nomura Holdings | 1.3 | |
2008-09-26 | Washington Mutual | JPMorgan | 1.9 | |
2008-09-28 | Bradford & Bingley | Government of the United Kingdom Santander | 1.838 | |
2008-09-28 | Fortis
|
BNP Paribas | 12.356 | |
2008-09-29 | Abbey National | Government of the United Kingdom Santander | 2.298 | |
2008-09-30 | Dexia | The Governments of Belgium, France and Luxembourg | 7.06 | |
2008-10-03 | Wachovia | Wells Fargo | 15 | |
2008-10-07 | Landsbanki | Icelandic Financial Supervisory Authority
|
4.192 | UK assets seized by UK government; bad assets nationalized by Iceland and retail operations reorganized as Landsbankinn |
2008-10-08 | Glitnir | Icelandic Financial Supervisory Authority | 3.254 | |
2008-10-09 | Kaupthing Bank | Icelandic Financial Supervisory Authority | 1.257 | |
2008-10-13 | Lloyds Banking Group | Government of the United Kingdom | 26.045 | |
2008-10-13 | Royal Bank of Scotland Group | Government of the United Kingdom | 30.641 | |
2008-10-14 | Bank of America | United States Federal Government
|
45 | |
2008-10-14 | Bank of New York Mellon
|
United States Federal Government | 3 | |
2008-10-14 | Goldman Sachs | United States Federal Government | 10 | |
2008-10-14 | JP Morgan | United States Federal Government | 25 | |
2008-10-14 | Morgan Stanley | United States Federal Government | 10 | |
2008-10-14 | State Street | United States Federal Government | 2 | |
2008-10-14 | Wells Fargo | United States Federal Government | 25 | |
2008-10-22 | ING Group | Government of the Netherlands
|
11.032 | |
2009-02-11 | Allied Irish Bank
|
Government of the Republic of Ireland
|
3.861 | |
2009-02-11 | Anglo Irish Bank | Government of the Republic of Ireland | 13.57 | |
2009-02-11 | Bank of Ireland | Government of the Republic of Ireland | 3.861 | |
2009-03-19[10] | IndyMac | OneWest Bank | unknown | |
2012-03-13 | Alpha Bank | Government of Greece | 2.096 | |
2012-03-13 | Eurobank | Government of Greece | 4.633 | |
2012-03-13 | National Bank of Greece | Government of Greece | 7.612 | |
2012-03-13 | Piraeus Bank | Government of Greece | 5.516 | |
2012-03-25 | Laiki Bank
|
Bank of Cyprus | 10.812 | |
2012-05-25 | Bankia | Government of Spain | 20.962 | |
2012-06-07 | Caixa Geral de Depositos
|
Government of Portugal | 1.78 | |
2012-06-07 | Millennium BCP
|
Government of Portugal | 3.3 |
Bank failures in the U.S.
In the U.S., deposits in savings and checking accounts are backed by the
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.[13]
No advance notice is given to the public when a bank fails. 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
See also
- Bank run
- Causes of the Great Depression
- List of banks acquired or bankrupted in the United States during the 2007–2008 financial crisis
- List of bank failures in the United States (2008–present)
- List of largest bank failures in the United States
- Too big to fail
- Volcker Rule
- Zombie bank
References
- ^ a b "When a Bank Fails - Facts for Depositors, Creditors, and Borrowers". Federal Deposit Insurance Corporation.
- ^ Brewer III, Elijah; Genay, Hesna; Hunter, William Curt; Kaufman, George G. (August 26, 2002). "The Value of Banking Relationships During a Financial Crisis: Evidence from Failures of Japanese Banks" (PDF). Federal Reserve Bank of Chicago. Archived (PDF) from the original on 2016-12-25. Retrieved 2021-05-14.
- The Cato Institute. Spring 1996. Archivedfrom the original on 8 December 2008.
- ^ "RBS launches $43B bid for NatWest - Nov. 29, 1999". money.cnn.com. Retrieved 2021-05-14.
- ^ "Bank of America to acquire FleetBoston for $47B - Oct. 27, 2003". CNN. October 27, 2003.
- ^ "J.P. Morgan to buy Bank One for $58 billion - Jan. 15, 2004". CNN. January 15, 2004.
- ^ "Bank Of America Acquires MBNA". CBS News. Associated Press. January 1, 2006.
- ^ Biondi, Paolo; Sisto, Alberto (2007-05-20). "UniCredit agrees to buy Capitalia in $29 bln deal". Reuters. Retrieved 2021-05-14.
- ^ Wilchins, Dan (2007-09-28). "ING Bank to acquire NetBank deposits". Reuters. Retrieved 2021-05-14.
- ^ "OneWest completes acquisition of Indymac Assets". Reuters. 2009-03-20. Retrieved 2021-05-14.
- ^ "Deposit Insurance FAQs". Federal Deposit Insurance Corporation.
- ^ "FDIC | Failed Bank List". Federal Deposit Insurance Corporation.
- ^ Laycock, Richard (2023-05-11). "List of bank failures: 2000 to 2023 | Finder". finder.com. Retrieved 2023-05-12.
- ^ Ellis, David; Sahadi, Jeanne (September 26, 2008). "JPMorgan buys WaMu". CNN.
- ^ "OTS 08-046 - Washington Mutual Acquired by JPMorgan Chase". Office of Thrift Supervision. September 25, 2008. Archived from the original on 15 January 2009.
- ^ Zijun, Liu; Quiet, Stephanie; Roth, Benedict (2015). "Banking sector interconnectedness: what is it, how can we measure it and why does it matter?" (PDF). Bank of England. Archived (PDF) from the original on 2021-10-05.
Further reading
- Calomiris, Charles W., and Joseph R. Mason. "Fundamentals, panics, and bank distress during the depression." American Economic Review (2003): 1615–1647. online
- Carlson, Mark. "Causes of bank suspensions in the panic of 1893." Explorations in Economic History 42.1 (2005): 56–80. online
- Wicker, Elmus. The banking panics of the Great Depression (2000).
- Wicker, Elmus. Banking panics of the gilded age (2006).
- Wicker, Elmus. "A Reconsideration of the Causes of the Banking Panic of 1930." Journal of Economic History 40.03 (1980): 571–583.