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?

fdic2013As 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 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

Though 268 banks have failed since January 1, 2008, there has been relatively little litigation related to the failed banks, as least so far. For example, the FDIC only recently filed its first action against former directors and officers of a failed bank (as discussed here). There have also been relatively few suits brought