The collapse of Silicon Valley Bank is one of those singular events, charged with implications and fraught with dangerous possibilities, but that is also still so recent that it is difficult to discern what it ultimately will mean. Earlier this week, in an excellent webinar presented by the Rock Center for Corporate Governance at the
After a run of several years where numerous banks failed each year, no banks failed in 2018, and only four failed in 2019. The low number of bank failures last year, and the absence of any bank failures the year before, clearly are signs that the economy is strong and the banking industry generally is profitable. But the banking sector is notoriously volatile and historically registers all of the economy’s ups and downs vividly. Is it possible that the current banking sector calm itself foreshadows trouble ahead? That is the question asked in a January 6, 2020 Wall Street Journal article entitled “Few Bank Failures Could Be a Warning Sign for U.S. Financial System” (here).
Continue Reading Few Banks Failed Last Year – Is That a Problem?
As the global financial crisis has receded further into the past and as other issues have crowded to the top of the agenda, the remaining vestiges from the credit crisis have faded into the background. But though the peak of the crisis is now nearly seven years behind us, the crisis remnants continue to work their way through the legal system. In particular, a large part of the wave of failed bank litigation that the FDIC filed against the former directors and officers of many of the U.S. banks that have failed continues to grind on, as evidenced in the FDIC’s latest professional liability litigation update, which the agency posted on its website on July 28, 2015 (here).
Continue Reading Meanwhile, Back at the FDIC Failed Bank Litigation Ranch
According to the FDIC’s latest Quarterly Banking Profile (here), as of September 30, 2013, there were 6,891 federally insured banking institutions, down from 6,940 at the end of the second quarter and down from 7,141 as of September 30, 2012. There were 8,680 banking institutions as recently as December 31, 2006, meaning that
The fallout from the ongoing banking crisis continues to emerge, with the arrival in recent days of still more bank failures and of even more FDIC lawsuits involving failed banks. Unfortunately, the hopes that that all of the bank failures might be safely behind us, or, as I recently suggested on this blog, the hopes
Though the current bank failure wave has been rolling for several years now and though there have been over 425 bank closures during that period, the much anticipated FDIC failed bank litigation has been slower to gain momentum – that is, perhaps, at least until now. Through the end of 2011, the FDIC had
While the condition of commercial banks continues to improve overall, the number of "problems institutions" also continues to grow, in both absolute and percentage terms, according to the FDIC’s latest report on the banking industry. The FDIC’s Quarterly Banking Profile, dated November 23, 2010 and reporting figures through September 30, 2010, showed that the
The lead article in the November 17, 2010 Wall Street Journal reported that the FDIC is conducting 50 criminal investigations of directors, officers and employees of failed banks. Given that (as of November 19, 2010) 314 banks have failed since January 1, 2008, this report suggests that the FDIC is investigating possible criminal charges in
Many observers have been waiting to see whether and to what extent the FDIC will pursue claims against former directors and officers of banks that have failed during the current bank failure wave. So far, the FDIC has filed just a single suit, against former officers of a subsidiary of IndyMac.
However, on
The FDIC closed took control of eight more banks this past Friday night, bringing the 2010 total of failed banks to 118. The eight closures is the largest single day total since April 16, 2010. The pace of closures remains well ahead of last year’s closure rate – the FDIC did not reach its