Now Available on PolicyMap: FDIC Bank Failures

One of the characteristic features of our current economic crisis has been the high rate of bank failures. Many banks’ assets (money owed to them by borrowers) have outnumbered their liabilities (deposits, which are owed back to depositors), and as a result, depositors lose faith in the ability of the bank to operate. During the Great Depression, pictured above in the form of James Stewart, when this happened, depositors would run on the bank, trying to withdraw their money before the bank ran dry. Today, when a bank is in a position to fail, the Federal Deposit Insurance Corporation, or FDIC, steps in and takes over the bank. PolicyMap now has point-level data on every FDIC bank failure since 2000.

When a bank failure occurs, the FDIC assumes responsibility for the deposits, as well as the shaky loans the bank was owed, and in most cases, transfers these deposits to a different, healthy bank. This is known as the “Purchase and Assumption” method. In other cases, the FDIC pays the depositors directly and attempts to sell whatever of the failed bank’s assets that it can. This is known as the “Payout Method”. On PolicyMap, you can filter and color code to see where these different types of FDIC takeovers took place. You can also filter by the amount of deposits and assets the bank had, as well as the year in which it failed. Our data also includes information on the acquiring institution.

Zoom and pan on the map above, the colors of the diamonds indicate the year when each bank closed:
Orange: before 2007
Purple: 2007
Green: 2008
Blue: 2009
Red: 2010

Or go to PolicyMap to learn more about each bank (Click Here)

To give some perspective of the scale of this crisis, in the weekend between when this data was processed and it appeared online, there were three bank failures. That’s how many failures there were in all of 2007. PolicyMap will update its database regularly.

Although “It’s a Wonderful Life” provided a dramatic portrayal of a 1930’s bank run, “This American Life” produced an engaging look at the 2009 FDIC takeover of the Bank of Clark County that details what actually happens when an FDIC decides it necessary to take over a bank. You can listen to that report in the second act of this episode.