Saturday, November 22, 2008

Graphs: FDIC Bank Failures

by Calculated Risk on 11/22/2008 07:03:00 AM

Three banks were closed by the FDIC yesterday. To put these failures into perspective, here are two graphs: the first shows the number of bank failures by year since the FDIC was founded, and the second graph shows the size of the assets and deposits (in current dollars).

FDIC Bank Failures Click on graph for larger image in new window.

Back in the '80s, there was some minor multiple counting ... as an example, when First City of Texas failed on Oct 30, 1992 there were 18 different banks closed by the FDIC. This multiple counting was minor, and there were far more bank failures in the late '80s and early '90s than this year.

Note: there are 8,451 FDIC insured banks as of Q3 2008.

However banks are much larger today.

FDIC Bank Failures The second graph (hat tip Kurt) shows the bank failures by total assets and deposits per year starting in 1934 (in current dollars adjusted with CPI).

WaMu accounts for a vast majority of the assets and deposits of failed banks in 2008, and it is important to remember that WaMu was closed by the FDIC, and sold to JPMorgan Chase Bank, at no cost to the Deposit Insurance Fund (DIF) or taxpayers.

There are many more bank failures to come over the next couple of years, mostly because of losses related to Construction & Development (C&D) and Commercial Real Estate (CRE) loans, but, excluding WaMu, the total assets and deposits of failed banks will probably be lower than in the '80s and early '90s.