A total of 92 banks failed during 2011, signaling a continuation of the crisis in the banking industry.  Although total banking failures during 2011 declined from the previous year, the number remains historically high.  The last time more than 50 banks failed in one year was 1992 or 20 years ago. The complete list of 2011 banking failures is listed below followed by some interesting [...]

Potential losses on Bank of America’s massive $75 trillion book of risky derivative contracts has just been dumped onto the FDIC by the Federal Reserve. Derivatives, once described by Warren Buffet as “financial weapons of mass destruction” are complex contracts entered into for speculation or to hedge risks linked to a wide variety of other (derivative) financial [...]

United Commercial Bank, San Francisco, CA,  which was closed by regulators on November 6, 2009, was the fourth largest banking failure of 2009 and resulted in losses to the FDIC Deposit Insurance Fund of $2.5 billion. Almost two years later, the FDIC announced that it was seeking to prohibit ten former officers of the bank from any further involvement in the banking industry and [...]

The European banking crisis continues to spiral out of control while hapless politicians fail to put together a credible resolution plan. Part of the problem may be that it is difficult to construct a solution when failing banks are bigger than the countries that are trying to rescue them. The latest European bank on the verge of collapse is giant Dexia, a Belgian-French bank.  [...]

Integra Bank, N.A., Evansville, Indiana, became the nation’s second largest banking failure of 2011 as regulators closed the insolvent bank. The FDIC, appointed as receiver, protected depositors by entering into a purchase and assumption agreement with Old National Bank, Evansville, Indiana, which will assume all deposits of the failed bank. All 52 branches of Integra Bank [...]

The failure of Washington Mutual Bank on September 28, 2008 was the largest banking failure in U.S. history. After nervous depositors starting withdrawing billions of dollars, regulators feared that a run on the Bank would cause a nationwide panic and decided to close the bank.  The FDIC, acting as receiver, sold Washington Mutual to JP Morgan. Washington Mutual, Inc., the holding [...]

December 31, 2010 – Banking failures for 2010 were at the highest level since 1992 as 157 financial institutions collapsed, the victims of collapsing real estate prices, a weak economy and poor lending decisions. The depth and breath of the current banking crisis makes the savings and loan crisis of the late 1980′s and early 1990′s look like a minor event.  Only [...]

The collapse of Washington Mutual Bank on September 25, 2008 is officially listed as the largest banking failure in history by the FDIC. The collapse of Washington Mutual occurred after nervous depositors withdrew $16.7 billion in the ten days prior to the bank’s collapse.   Fearing a classic run on the bank situation and perhaps a nationwide financial panic, regulators [...]

September 3, 2010 – FDIC Chairman Sheila Bair, in testimony before the Financial Crisis Inquiry Commission discussed how future systemic risks can be better managed and reduced under provisions of the Dodd-Frank Act.  Chairman Bair also said that new liquidation authority under the Act is a fundamental factor that will allow the U.S. to end the practice of “Too Big [...]

July 14, 2010 – Banking regulators agreed to give the FDIC expanded authority to conduct examinations of insured depository institutions that the FDIC does not directly supervise, under a new memorandum of understanding (MOU).  The FDIC’s position is that it should have more than “backup authority” and be allowed to take a more active on-site presence in [...]