What Happened to the Banks That Failed?

Regulators should learn from the 2008 financial crisis about how best to handle failed banks.

Banking remains very much a local business and a people business.

During the financial crisis and its aftermath, the Federal Deposit Insurance Corporation (FDIC) sold nearly 500 failed banks in the United States.

These hurried sales of institutions seized by the agency reverberated throughout local and regional economies and had serious consequences nationally. The FDIC lost $90 billion in the deals, and at the height of the crisis in 2009, the agency’s deposit insurance fund was $21 billion underwater.

The FDIC lost US$90 billion in the sales of failed banks following the 2008 financial crisis.