This year’s bank failures eclipse 2008 levels
It’s only May, but bank failures so far this year are already bigger than any other year in the last two decades.
First Republic Bank (FRC), Silicon Valley Bank, and Signature Bank are the second, third, and fourth largest bank failures in U.S. history. This year’s crashes are even bigger than those during the 2008 financial crisis.
At $548.5 billion, the combined assets of the three banks that failed in 2023 dwarf the combined assets of all banks that failed in 2008 by $175 billion and are only about $173 billion less of all other failed banks since 2001.
It only took about two months for these banks to fail this year. The tumultuous bank failures began in March when the Federal Deposit Insurance Corporation (FDIC) placed Silicon Valley Bank and Signature Bank into receivership, taking control of their assets, liabilities and deposits.
The failure of the two banks caused turmoil in the regional banking sector that brought down First Republic Bank. The San Francisco-based bank went through a tumultuous month of plummeting share prices and failed attempts to find a buyer before eventually also being placed under FDIC receivership early Monday morning.
The collapse of the three banks cost the FDIC an estimated $36 billion of its deposit insurance fund.