U.S. BANK FAILURES

[Audio] U.S. BANK FAILURES ECON 201: U.S. banking stability What causes banks to fail, and how does regulation protect the economy? Historical comparisons: 1937, 2008, 2009, 2020, 2024, and 2026 CHAZWANI KELLY / ECON 201 / 11 October 2026 U.S. BANK FAILURES. ECON 201: U.S. banking stability CHAZWANI KELLY / ECON 201 / 11 October 2026.

[Audio] Bank failure and the FDIC A bank fails when regulators close it because it cannot operate safely or meet its obligations. Common causes include loan losses, insufficient capital, and liquidity shortages. A bank run occurs when many depositors withdraw funds at once, potentially exhausting available liquidity. Congress created the FDIC in 1933 during the Great Depression. Deposit insurance began in 1934. The FDIC generally insures eligible deposits up to $250,000 per depositor, per insured bank, per ownership category. Sources: FDIC historical timeline and deposit insurance guidance. Bank failure and the FDIC A bank fails when regulators close it because it cannot operate safely or meet its obligations. Common causes include loan losses, insufficient capital, and liquidity shortages. A bank run occurs when many depositors withdraw funds at once, potentially exhausting available liquidity. Congress created the FDIC in 1933 during the Great Depression. Deposit insurance began in 1934. The FDIC generally insures eligible deposits up to $250,000 per depositor, per insured bank, per ownership category..

[Audio] Bank failures in 2026 Assets Nano Banc Tioga-Franklin Small Business Bank Kentland Federal Community Bank & Trust Metropolitan Capital 736 68 73 3.7 288 261.10000000000002 Deposits Nano Banc Tioga-Franklin Small Business Bank Kentland Federal Community Bank & Trust Metropolitan Capital 686 67 68.8 3.7 268 212.1 Source: FDIC. Six failures year to date as of October 11, 2026. Figures are approximate. Bank failures in 2026 6 Banks failures were identified year to date..

[Audio] Historical bank failure comparison Assets and deposits ($ millions) Bank failures 1937 2008 2009 2020 2024 2026 YTD 75 25 140 4 2 6 Year Assets Deposits 1937 0.019284 0.032804 2008 373,588.8 264,160.6 2009 170,909.4 137,351.7 2020 458.0 434.8 2024 6,107.8 4,097.5 2026 YTD 1,429.8 1,305.6 Sources: FDIC and supplied historical data. Nominal dollars. 2026 is year to date. This slide displays the amount of Bank failures and the balance sheets for the years 1937,2008,2009,2020,2024 and 2026..

[Audio] Recent failures: 2026 and 2020 2026: Six bank failures year to date, two more than in all of 2020. Unemployment was 4.2% in September. On September 16, the Federal Reserve raised its policy rate target to 3.75%–4.00%. 2020: Four bank failures during the year. COVID-19 caused a sharp recession and a decline in real GDP. Fiscal support and monetary easing supported the economy, while deposit insurance and capital buffers helped limit banking stress. Lesson: A severe recession does not automatically produce a large number of bank failures. Sources: FDIC, BLS September 2026 employment data, and Federal Reserve. Recent failures: 2026 and 2020 2026: Six bank failures year to date, two more than in all of 2020. Unemployment was 4.2% in September. On September 16, the Federal Reserve raised its policy rate target to 3.75%–4.00%. 2020: Four bank failures during the year. COVID-19 caused a sharp recession and a decline in real GDP. Fiscal support and monetary easing supported the economy, while deposit insurance and capital buffers helped limit banking stress. Lesson: A severe recession does not automatically produce a large number of bank failures..

[Audio] Financial crisis: 2008 and 2009 2008: 25 bank failures. The collapse of the housing bubble and mortgage losses weakened bank balance sheets. Credit tightened, business investment fell, and real GDP declined. 2009: 140 bank failures, 115 more than in 2008. Loan losses continued to emerge. Unemployment reached 10% in October, and weak credit availability and consumer confidence prolonged economic weakness. The Great Recession lasted from December 2007 to June 2009. Bank failures continued after the recession ended. Sources: FDIC crisis history and BLS recession analysis. Financial crisis: 2008 and 2009 2008: 25 bank failures. The collapse of the housing bubble and mortgage losses weakened bank balance sheets. Credit tightened, business investment fell, and real GDP declined. 2009: 140 bank failures, 115 more than in 2008. Loan losses continued to emerge. Unemployment reached 10% in October, and weak credit availability and consumer confidence prolonged economic weakness. The Great Recession lasted from December 2007 to June 2009. Bank failures continued after the recession ended..

[Audio] 2024: Failed bank assets and deposits Republic First Bank, doing business as Republic Bank Closed April 26, 2024. Total assets: approximately $6 billion. Total deposits: approximately $4 billion. Fulton Bank assumed substantially all deposits and acquired substantially all assets. The First National Bank of Lindsay Closed October 18, 2024. Total assets: $107.8 million. Total deposits: $97.5 million. First Bank & Trust Co. assumed its insured deposits. Bank size matters: Failure counts alone do not measure the potential financial impact. Source: FDIC 2024 bank failure information. 2024: Failed bank assets and deposits Republic First Bank, doing business as Republic Bank Closed April 26, 2024. Total assets: approximately $6 billion. Total deposits: approximately $4 billion. Fulton Bank assumed substantially all deposits and acquired substantially all assets. The First National Bank of Lindsay Closed October 18, 2024. Total assets: $107.8 million. Total deposits: $97.5 million. First Bank & Trust Co. assumed its insured deposits. Bank size matters: Failure counts alone do not measure the potential financial impact..

[Audio] 1937: Historical perspective The historical data supplied for this analysis report 75 bank failures. Reported assets: $19.284 Thousand Reported deposits: $32.804 Thousand The original figures are in thousands of dollars. These amounts used in 1937 are not adjusted for inflation. The 1937–1938 recession brought falling output and renewed financial pressure. Differences in purchasing power and banking system size limit comparisons with modern dollar totals. Sources: Supplied historical FDIC figures and Federal Reserve History. 1937: Historical perspective The historical data supplied for this analysis report 75 bank failures. Reported assets: $19.284 Thousand Reported deposits: $32.804 Thousand The original figures are in thousands of dollars. These amounts used in 1937 are not adjusted for inflation. The 1937–1938 recession brought falling output and renewed financial pressure. Differences in purchasing power and banking system size limit comparisons with modern dollar totals..

[Audio] Macroeconomic impact and prevention Bank failures can weaken trust and disrupt the relationship between banks and depositors. Reduced lending can lower business investment , consumption, and weaken aggregate demand. Prevention strategies implementation of Capital and liquidity requirements, supervision, and prudent lending can help to reduce risk. Deposit insurance protects eligible deposits and helps maintain confidence, but regulation cannot prevent every failure. My personal application: I will choose FDIC-insured banks and keep eligible deposits within the insurance limits. If needed, I will diversify funds and investments across separately insured banks. Sources: FDIC deposit insurance guidance and crisis history. Macroeconomic impact and prevention Bank failures can weaken trust and disrupt the relationship between banks and depositors. Reduced lending can lower business investment , consumption, and weaken aggregate demand. Prevention strategies implementation of Capital and liquidity requirements, supervision, and prudent lending can help to reduce risk. Deposit insurance protects eligible deposits and helps maintain confidence, but regulation cannot prevent every failure. My personal application: I will choose FDIC-insured banks and keep eligible deposits within the insurance limits. If needed, I will diversify funds and investments across separately insured banks..

[Audio] References FDIC. Bank Failures in Brief and Failed Bank List. FDIC. Bank Failures and Assistance Data (historical data). FDIC. Understanding Deposit Insurance and Historical Timeline. FDIC. Bank Failures: 2024. FDIC. Crisis and Response: An FDIC History, 2008–2013. BLS. Unemployment rate little changed at 4.2% in September 2026. BLS. The Recession of 2007–2009. Federal Reserve. FOMC statement, September 16, 2026. Federal Reserve History. Recession of 1937–38. Full source URLs appear in the relevant slide notes. Accessed October 11, 2026. https://www.fdic.gov/resources/resolutions/bank-failures/in-brief/index https://banks.data.fdic.gov/explore/failures https://www.fdic.gov/resources/deposit-insurance/understanding-deposit-insurance https://www.fdic.gov/90years https://www.fdic.gov/resources/resolutions/bank-failures/in-brief/2024 https://www.fdic.gov/publications/crisis-and-response-fdic-history-2008-2013 https://www.bls.gov/opub/ted/2026/unemployment-rate-little-changed-at-4-2-percent-in-september-2026.htm https://www.bls.gov/spotlight/2012/recession/audio.htm https://www.federalreserve.gov/newsevents/pressreleases/monetary20260916a.htm https://www.federalreservehistory.org/essays/recession-of-1937-38.