100 Bank Failures And Counting!

“More banks have failed in 2009 than the rest of the decade combined,” writes Ariel Nelson at CNBC. Today, Partners Bank in Naples, Florida closed its doors, making it the 100th bank to fail this year. Click the link to see a map of where bank failures have happened the most over the past 10 months.

“100th Bank Failure of the Year” [CNBC]
(Photo: naught_facility)


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  1. The-Lone-Gunman says:

    Curious: How are foreign banks faring? Are they experiencing the same rate of failure overseas, or is this primarily a US phenomenon?


    • nycaviation says:

      @The-Lone-Gunman: Not the same rate of failure for a number of reasons.

      1. The ideal of home ownership is not the holy grail in Europe that it is in the US. People are not as eager to dig themselves into debt just for the sake of owning. Class structures in Europe also play a role.

      2. Unlike American legislators, European parliaments did not push their banks to make as many mortgages as possible, consequences be damned, simply to promote the dream of homeownership to more citizens.

      • nycaviation says:


        In Europe, there are fewer small local banks and more national mega banks. Even more dangerous than American banks which are too big to fail, some European banks are bigger than the GDP of countries where they are based, making them too big to bail out.

        Some European banks have failed during this crisis, but largely as a result of bad investments in America, i.e. mortgage-backed securities.

    • jamar0303 says:

      @The-Lone-Gunman: And as for Asia, I haven’t heard a single bank failing in China and the surrounding countries. Mainly because in China most, banks have the government standing behind them (and the few that don’t, like HSBC and Citibank, are all multinationals- AKA “too big to fail”).

    • Zenatrul says:


      I haven’t heard of any banks failing in Canada, although my bank did up my rewards for using 1 of my cards by double so I guess they are doing alright. Interest rate is crap though.

  2. Sudonum says:

    Did the former CEO get a set of steak knives or a toaster for being the 100th failure?

    • P_Smith says:

      @Sudonum: “Did the former CEO get a set of steak knives?”

      In his chest, preferably.





      I was talking about his flatware chest. What did you think I meant?

  3. amberlink says:

    Can anyone here or anywhere else define, “failure”? My question is we use that word, but does that mean the CUSTOMERS are screwed and the bank gets to close its doors and the principals get to walk away unscathed for making REALLY bad loans to people who could never pay them back?

    Come on, “failure” is a fancy word for “screwed customers”.

    • ZekeSulastin says:

      @amberlink: Instead of giving in to the usual Consumerist commenter bleating that pretty much destroys any discussion, why not spend 5 minutes on Google or go to the gov’t agency responsible for dealing with them?


      Barring that, you can even check Wikipedia:


      etc. ad nauseam. To put it simply, a bank fails when liabilities exceed assets and the gov’t steps in to rectify this. As a result, FDIC insurance steps in to cover depositors’ funds if the bank cannot. Most if not all depositors should be fine, save the need to get a new bank, and those with loans outstanding still need to repay them.

      • FDCPAGuy says:

        Oh and after a FDIC takeover the FDIC can also line up another bank to buy out the failed bank. Meaning that the old banks customers might come back Monday to a different name on the door and their accounts migrated to the new bank.

      • RogerTheAlien says:

        @ZekeSulastin: Instead of being a total dick, and assume that amberlink didn’t do any research when maybe he/she just needed it in more laymen’s terms than offered, you could just answer the question politely and keep your impolite comments to yourself. Or, you could just not say anything at all.

        • ThinkerTDM says:

          @RogerTheAlien: I just assumed that the poster was too stupid to type into google “bank failure”.
          Or, they could have remembered it from middle/high school social studies- I do, and it’s been nearly 20 years.

    • Eyebrows McGee (now with double the baby!) says:

      @amberlink: NPR had a really interesting piece on FDIC takeover of a failed bank … apparently most people who go through it feel pretty good about it and it’s very well-done.

  4. H3ion says:

    The only people who really get screwed in a bank “failure” are the bank’s security holders; stock and bonds. All depositary accounts are insured by FDIC and if the FDIC is able to merge the failed bank into a solvent bank, even accounts in excess of the FDIC limit should come out OK.

    That said, 100 is probably low. I would expect that number to double within the next twelve months but I think it will be smaller banks; that is, I don’t think any of the really large banks will be allowed to fail, even if they’re as screwed up as B of A.

    • RandomHookup says:

      @H3ion: Except that the money comes from the FDIC. Generally, that comes from the insurance premiums paid by the bank…but when they run out of money, we the taxpayers will likely step in.

  5. StanTheManDean says:

    Oh look, banks in Mississippi, Louisiana, West Virgina, Arkansas etc have not failed.

    Why? Smaller banks? More conservatively operated? Tighter state regulations? Less risky/volatile/churning realestate markets?

  6. PeteRR says:

    106. And counting.

  7. gStein_*|bringing starpipe back|* says:

    U-S-A! U-S-A! WE’RE #1! U-S-A!

  8. P_Smith says:

    It seems like the single biggest cause of bank failures, unique to the US, isn’t addressed because no one wants to: the ratio of holdings to loans. But, of course, doing so would require or lead to accountability by those who made it possible through the the Gramm-Leach-Bliley Act of 1999….

    It was only in the US that these institutions were being allowed to have ludicrously low ratios, some around 1% ($1 in the bank for every $100 deposited). The places outside the US that are most affected are countries and banks that dealt heavily with them and bought into the “subprime” scam. Countries and banks that stayed out haven’t had the same problems because they avoided the scam but also because they kept their ratios up.

  9. Thermopyle says:

    I don’t think most people realize it, but it’s good that these banks fail. If you suck at your business, you fail.

    It’s a good thing.

  10. failurate says:

    Bank of Elmwood, Racine, Wisconsin. Closed on Friday, opened today as a branches of Tri-City Bank. Is a forced closing and take over the same as a failure?

  11. MooseOfReason says:

    If we didn’t repeal Glass-Steagall, a lot more banks would have failed.

    “White has examined the failure rate in 1930-33 of national banks without security affilates and national banks with security affiliates. He finds that banks without security affiliates were four times as likely to fail as were those with affiliates.”


    • hi says:

      @MooseOfReason: You know what’s funny? On wikipedia under “Gramm-Leach-Bliley Act” which repealed the Glass-Steagall act it says:

      “President Barack Obama believes that the Act directly helped cause the 2007 subprime mortgage financial crisis.”

      Yet Obama’s economic adviser “Larry Summers” is the one who helped write the “Gramm-Leach-Bliley Act” which repealed the Glass-steagall Act.

      • MooseOfReason says:

        @hi: I would argue President Obama doesn’t know his economics.

        Oh, and he should get a refund for his degree in constitutional law.