Bank Failure

The closing of an insolvent bank by a federal or state regulator. The comptroller of the currency has the power to close national banks; banking commissioners in the respective states close state-chartered banks. Banks close when they are unable to meet their obligations to depositors and others. When a bank fails, the Federal Deposit Insurance Corporation (FDIC) covers the insured portion of a depositors balance.

During the financial crisis that started in 2007, the biggest bank failure in U.S. history occurred when Washington Mutual with $307 billion in assets closed its doors. Another large bank failure had occurred just a few months earlier, when IndyMac was seized.

The second all-time largest closure was $40 billion Continental Illinois in 1984.


Investment dictionary. . 2012.

Look at other dictionaries:

  • bank failure — noun the inability of a bank to meet its credit obligations • Hypernyms: ↑failure …   Useful english dictionary

  • bank failure — See failed bank …   Ballentine's law dictionary

  • Bank of United States — This article is about a commercial bank in New York that failed in 1931. For federal and other private banks in the US, see Bank of the United States (disambiguation). Crowds outside the Bank of United States when it failed The Bank of United… …   Wikipedia

  • bank — bank1 /bangk/, n. 1. a long pile or heap; mass: a bank of earth; a bank of clouds. 2. a slope or acclivity. 3. Physical Geog. the slope immediately bordering a stream course along which the water normally runs. 4. a broad elevation of the sea… …   Universalium

  • Bank of Ireland — Infobox Company company name = Governor and Company of the Bank of Ireland company company type = Public company foundation = flagicon|Ireland Dublin, Ireland (1783) location=flagicon|Ireland Dublin, Ireland key people = Brian Goggin, CEO area… …   Wikipedia

  • Bank run — A bank run (also known as a run on the bank) occurs when a large number of bank customers withdraw their deposits because they believe the bank is, or might become, insolvent. As a bank run progresses, it generates its own momentum, in a kind of… …   Wikipedia

  • Bank condition — is a random variable used to represent the probability of failure of a bank. The true probability of failure is unknown to depositors as well as regulators. Even the bank managers themselves who manage the risky asset portfolio of the bank might… …   Wikipedia

  • failure — fail‧ure [ˈfeɪljə ǁ ər] noun 1. [countable, uncountable] COMMERCE a situation in which a business that is not successful has to close because it is losing money: • The Official Receiver recommended a detailed investigation into the reasons for… …   Financial and business terms

  • Bank of Credit and Commerce International — Infobox Defunct company company name = Bank of Credit and Commerce International company slogan = company type = fate = Liquidation Predecessor = successor = foundation = flagicon|UK London in 1972 defunct = 1991 location = flagicon|UK London… …   Wikipedia

  • failure — noun 1 lack of success ADJECTIVE ▪ complete, total ▪ abject, humiliating ▪ The attempt ended in abject failure. ▪ inevitable …   Collocations dictionary

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.