Bank failures have been a recurring issue throughout history, caused by various factors ranging from economic downturns to poor management practices. The Stock Market Crash of 1929 led to a massive loss of wealth and confidence in the financial system. Many people rushed to withdraw their deposits, leading to over 5,000 bank failures. The deregulation of the savings and loan industry in the 80s & 90s led to riskier investments. Silicon Valley Bank and similar institutions grew rapidly and were heavily concentrated in specific sectors, such as technology and startups, making them vulnerable to sector-specific downturns. Across all these periods, common themes include economic downturns, poor regulation, risky investment & lending practices, rapid changes in Interest Rates, and external shocks.
Purpose: Learn about why banks have failed and how the FDIC and regulators have managed these failures.
Facilitator: Fred Eisenreich
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