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FAILURE OF BANKS IN USAAND ITS IMPACT ON THE

GLOBAL RECESSION

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U.S. BANKING INDUSTRY

Over 2800 Banks arelocated in USA.

To ! "anks in U.S. are#$

$%& 'or(an )*ase$Bank o+ A,erica$)iti(ro-

Re(-lated at "ot* +ederaland state level.

All co,,ercial "anks t*at

accet deosits arere -ired to et /DI)

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)a-ses o+ Bank /ail-res

No i-id reso-rces

Risk1 oans

Re(-lator1 Iss-es

Risk1 ,ana(e,ent

decisions

Inaroriate loans to

"ank insiders

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ist o+ 'aor U.S. Bank/ail-res

3as*in(ton '-t-al Bank Ind1,ac Bank

e*,an Brot*ers

Bank United /SB A,Tr-st Bank

3estern Bank

/ranklin National Bank

4-ro Bank

)it1 Bank

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Reasons O+ /inancial 'eltdo5no+ 2008

Rise in Subprime lendin

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B-rstin( o+ t*e 6o-sin(B-""le.

4as1 )redit )onditions$ o5interest rates

Over$evera(in(

Inacc-rate )redit Ratin(s Govt. &olicies$ Dere(-lation

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GOBA 4//4)TSO/ U.S.

'4TDO3N

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T64 GR4AT R4)4SSION

$Une,lo1,ent$o5er O-t-t$o5er Invest,ent

$Ne(ative (ro5t* rate$/all in t*e National Inco,e$Deression

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)ollase o+ ,aor7nancial instit-tions.

)ras* o+ Stock 'arkets.

oss to Investorsaro-nd t*e (lo"e

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3*at did Govern,ents do Govern,ents resonded s5i+tl1 and

decisivel1 to save t*e s1ste,. )entral "anks steed in and rovided

li-idit1 to t*e "ankin( s1ste, allo5in(it to kee +-nctionin(.

49anded t*e ,one1 s-l1.

Govern,ents rovided "ailo-ts +or,aor 7nancial instit-tions to avert

t*eir collase . Govern,ents also c-t ta9es and raised

sendin( to revent t*e econo,1+ro, +allin( into

a dee recession..