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There are fewer bank failures in recent economic downturns since the Great Depression.

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Silicon Valley Bank and Signature Bank have shut down in 2023.
Since the year 2000, there have been 562 bank failures.
There are still fewer failed banks in recent economic downturns than during the Great Depression, though.

So far in 2023, two banks have shut down. You might be wondering whether bank failures are common or worrying about more banks closing.

To help you understand the news on the most recent bank failures, we’ll explain why the most recent bank failures occurred. We’ll also cover how banking regulation has changed to better protect consumers.

What is a failed bank? 

When a bank can’t manage obligations, a federal or state agency will shut it down. The Federal Deposit Insurance Corporation, or FDIC, will become the “receiver” of the failed bank. The FDIC will make sure that depositors get their insured deposits. 

The FDIC insures up to $250,000 per depositor, per ownership category. (Similarly, the National Credit Union Administration, or NCUA, insures up to $250,000 per depositor, per ownership category for credit unions.) Any money beyond the $250,000 limit is considered uninsured. This means you might not get all your money if a bank shuts down.

Note: You can read more about what happens if your bank fails here. 

2023 bank failures

Silicon Valley Bank and Signature Bank were both shut down in March 2023. Here’s a brief overview of why these two banks failed.

Why did Silicon Valley Bank collapse?

Silicon Valley Bank invested a large …read more

Source:: Businessinsider