THIS ISN’T 2008 FOR GOODNESS SAKE!

The global financial crisis of 2008 was a catastrophic event that resulted in the collapse of several major banks and financial institutions around the world. The crisis had far-reaching effects on the global economy and led to a prolonged period of economic recession. Since then, the global banking industry has undergone significant regulatory reforms aimed at preventing a similar crisis from occurring in the future.

However, despite these reforms, there have been a number of bank failures in recent years, including in 2021. In this blog post, we will examine the bank failures this year compared to 2008.

Bank Failures in 2008

In 2008, the global financial crisis resulted in the failure of several major banks, including Lehman Brothers, Bear Stearns, and Washington Mutual in the United States, and Northern Rock and Bradford & Bingley in the United Kingdom. These failures were largely attributed to the subprime mortgage crisis and the housing market crash, which caused a ripple effect throughout the global financial system.

The impact of these failures was significant and long-lasting. They led to a sharp decline in consumer and investor confidence, which in turn led to a credit crunch, a decrease in lending, and a contraction in economic activity. The global economy entered a prolonged period of recession, which lasted for several years.

Bank Failures in 2021

In 2021, there have been several bank failures around the world. In the United States, the Federal Deposit Insurance Corporation (FDIC) has reported six bank failures so far this year. These include First City Bank of Florida, Almena State Bank, The First State Bank of Barboursville, City National Bank of New Jersey, The First National Bank of Groton, and The Bank of Fayette County.

In other parts of the world, there have also been bank failures, including in Pakistan and Azerbaijan. In Pakistan, the State Bank of Pakistan took over the management of the troubled Summit Bank, while in Azerbaijan, the Central Bank of Azerbaijan revoked the license of AtaBank.

The reasons for these bank failures vary, but they are often attributed to factors such as poor management, inadequate risk management, and insufficient capital reserves. However, it is important to note that while these failures are concerning, they are not on the same scale as the failures seen in 2008.

Conclusion

The bank failures seen in 2008 were a catastrophic event that had far-reaching consequences for the global economy. Since then, significant regulatory reforms have been implemented to prevent a similar crisis from occurring in the future. However, despite these reforms, there have been several bank failures in 2021, which are concerning but not on the same scale as the failures seen in 2008. It is important for regulators to continue to monitor the banking industry closely and to take action to prevent further failures from occurring.