Bank Failures over Last 25 Years Essay

The banks began to fail because of misappropriation of silver and loose modify practices to the majority of the US citizens living above their means. The g everyplacenment estimated 2,657 closures from bank failures from 1987 to 2012 (http//bankvibe. com). Currently, there is a total 7,074 FDIC see to it banks (http//www. mybankertracker. com/banks). This caused was from reliance stipulations were lowered to allow the subpar credit working Americans to obtain personal imparts, car, homes or another(prenominal) amenities. just about banks were real stable only were not prep ard for the financial bubble to burst in the place near future. Moreover, in my experience with working for a few financial institutions, I observed the credit parameters amended to fit a customers financial state. These loans stipulations were as follows no documentation, no income, no assets, or no verification job underwriting went only off credit score in about cases. The dainty, mid-size, and corpor ate banks are all competing for the in the public eye(predicate)s business which caused disarray of bad banking decisions.Hence, the banks that failed from 1987 until present snip in researching last 25 years we dont read much about these failures in our daily newspapers, simply just there is an over abundant of banks failures every day and this has become very common (www. davemanuel. com/history-of-bank-failures-in-the-united-states. php) Nevertheless, these banking behaviors caused a massive failure of mortgage banks and commercial banks.This caused the government to become very multiform when Freddie Mac and Fannie Mae were affected by these lending behaviors (Johnson, 2010, p. 4-28). My research will display the trend of failing banks over the last 25 years and data will give insight on the numbers of banks. The federal Reserve had centralized banking responsibility to save the banks, they deemed too big to fail. The depositors decide to simultaneously withdraw their funds from banks, which resulted in a bank panic. If several banks experience these actions at same time, this throws the banks into a bank panic.The Feds loan the banks money at a discounted rate to sustain these indiscretions (Hubbard & Obrien, 2010, p. 37). Consequently, the US Congress started holding hearings, and oppugn these huge corporate banks whose bonuses, incentives, and other loose business practices. These banks closed, sold, or merged with other banks to survive needful reality of failing (NAOAKI, 2011, p29). The investment banks were also involved in the buying and selling of bundled mortgages, investments, or other banking products to raise their capital. Lehman Brothers, Bear Stearns, and Countrywide were guilty of such practices as seen all over the TV study news.These companies have been either sold or closed down after the hearings on Capitol Hill. Currently, In suppose to resolve this crisis, banks have drastically changed their lending practice and the closure o f failing banks has slowed down. Corporate banks were also tooth root to receive stimulus funds to save them from failing. The government found themselves in a position of victimization the Feds to prevent catastrophic melt down of financial industry.The 12 districts are replenished to keep the general public getting loans thus, keeping money in circulation (Hubbard & Obrien, 2010, p. 438). All banks did not take the stimulus funds, but devised a plan to prevent failure. Therefore, banks had to pay fanny the loans in the billions, but were not charged bet if they paid the funds back early. The small to mid-size banks were left to fail, because they were not too big to fail. A manifold standard was shown to small businesses the backbone of America (http//economics. bout. com/).A bank of ineffective practices has shown small mom and sparkling water banks they should not try to compete with Corporate Banking in America. They are not going to be bailed out, and allowed to fail. The se small or mid-size banks are microeconomics not in macroeconomics equation of America big businesses. In conclusion, the bank failures are significant to our economy tremendously regardless the size, from the housing market, investments, or checking/ salves accounts.The Feds saved the banks worth saving to boost the economy and slow down inflation. Perhaps, further research conducted to answer the following questions, and ask the questions Do you think if people were disposed the stimulus funds instead of the banking institutions? What kind of economic boost would banks have, if the citizens were given stimulus funds? How does the government determine who receives funds to survive a financial set back? Why are parts of corporate America deemed too big to fail?