Bank Failures in Perspective (Chart)...Not Nearly as Bad as Some would have you Believe

[masmdu]

"There have now been 5 FDIC insured bank failures in 2008, the most since 2002 (11). But this is nothing compared to number of failures during the S&L crisis in the '80s and early '90s.

To put the 2008 failures into perspective, here is a graph of bank failures since the FDIC was created in 1934. The 5 failures this year hardly show up on the graph."

More failures will likely come but not as many as the 80's/90's



Edit for link to enlarge-able chart
http://calculatedrisk.blogspot.com/2008/07/coming-bank-failures.html

[BlooInBloo]

1. Oh gawd....

http://calculatedrisk.blogspot.com/

[masmdu]

4. Care to elaborate....?

[Whoa_Nelly]

2. That graph is small and hard to read

But, found it here to be able to click on and enlarge:
(interesting the number of failures during Poppy's term)
http://bubblemeter.blogspot.com/2008/07/graph-bank-failures-per-year.html


Also, here's a one with article re: since 2000:

http://www.fivecentnickel.com/2008/07/17/the-recent-history-of-bank-failures/

[indepat]

3. The graph will be more telling when the counting is done this time around

when a companion graph depicting the total assets/liabilities of the failed banks will also be needed. :D

[masmdu]

5. True enough ...

[ProfessorGAC]

6. Yeah, And I'd Like To See Their Metrics

When the regulators come through they measure against a scale of metrics. For CU's it's called a CAMEL rating. (Capital, Assets, Management, Equity, Liquidity) Banks have something similar. I'd like to see how many of the non-failing banks end up with very low ratings liquidity or equity. There is wide gulf between failure and poor performance, and i'd bet that we're going to see lots of poor ratings, even in banks not at imminent risk of failure.
The Professor

[masmdu]

7. Intresting info...thanks for that

[indepat]

8. And this is likely to worsen as Greenspan's housing bubble (Alan Abelson's assessment, not mine)

and implosion of financial derivatives/CDOs come to full fruition, leaving the economy in shambles in their wakes. As this all worsens, many a credit-worthy borrower will have become unable to service his/her debt and a mountain of loans that were rock-solid when made, will have become bad, necessitating more write-downs, more troubled banks, and more bank failures. When the final accounting of this calamity is written, I'm guessing it will be in direct portion to the amount of fraud and greed perpetuated through predatory lending and these highly complex, little understood, and too-often fraudulent financial products which were typically marketed as high-quality. :shrug: :P