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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..