Bank Failures
Mar 16, 2023
A bank fails when it cannot meet its financial obligations to creditors or depositors because it has become insolvent or no longer has enough liquid assets to fulfill its payment obligations.
The most prominent American bank failure was Washington Mutual’s collapse in 2008. At the time, it had about $310 billion in assets. The bank failure was caused by several factors, including a poor housing market and a run on deposits in which clients withdrew $16.7 billion within two weeks.
