25 Years of Bank Failures
Last 25 years of Bank Failures in the US
The banks began to fail because of misappropriation of funds and loose lending practices to the majority of the US citizens living above their means. The government estimated 2,657 closures from bank failures from 1987 to 2012 (http://bankvibe.com). Currently, there is a total 7,074 FDIC insured banks (http://www.mybankertracker.com/banks).This caused was from credit stipulations were lowered to allow the subpar credit working Americans to obtain personal loans, car, homes or other amenities. Most banks were very stable but were not prepared for the financial bubble to burst in the distance near future.
Moreover, in my experience with working for a few financial institutions, I observed the credit parameters amended to fit a customer’s financial state. These loans stipulations were as follows: no documentation, no income, no assets, or no verification job; underwriting went only off credit score in some cases. The small, mid-size, and corporate banks are all competing for the public’s business which caused disarray of bad banking decisions. Hence, the banks that failed from 1987 until present time in researching last 25 years; we don’t read much about these failures in our daily newspapers, simply just; there is an over abundant of banks failures every day and this has become very common (www.davemanuel.com/history-of-bank-failures-in-the-united-states.php)
Nevertheless, these banking behaviors caused a massive failure of mortgage banks and commercial banks. This caused the government to become very involved when Freddie Mac and Fannie Mae were affected by these lending behaviors (Johnson, 2010, p. 24-28). My research will display the trend of failing banks over the last 25 years and data will give insight on the numbers of banks. The Federal Reserve had centralized banking responsibility to save the banks, they...