Bank Failures over Last 25 Years Essay

The situates began to miscarry because of misappropriation of funds and slacken modify acts to the majority of the US citizens living above their means. The giving medication estimated 2,657 closures from beveling company failures from 1987 to 2012 (http//bankvibe. com). Currently, there is a total 7,074 FDIC insured banks (http//www. mybankertracker. com/banks). This caused was from credit stipulations were lowered to surrender the subpar credit working Americans to obtain personal loans, car, homes or otherwise amenities. around banks were real stable moreover were not prep ared for the financial riffle to burst in the distance near future. Moreover, in my experience with working for a few financial institutions, I observed the credit parameters amend to fit a customers financial state. These loans stipulations were as follows no documentation, no income, no assets, or no verification job underwriting went undecomposed off credit score in some cases. The fiddling, mid-size, and corporate banks are all competing for the publics business which caused disarray of bad banking decisions.Hence, the banks that failed from 1987 until beat time in researching be 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 involved 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 excessively 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 coin at a discounted rate to sustain these indiscretions (Hubbard & Obrien, 2010, p. 37). Consequently, the US Congress started holding hearings, and questioning these huge corporate banks whose bonuses, incentives, and other loose business practices. These banks closed, sold, or merged with other banks to survive fatal reality of failing (NAOAKI, 2011, p29). The investment banks were also involved in the buy and selling of bundled mortgages, investments, or other banking products to raise their capital. Lehman Brothers, Bear Stearns, and Countrywide were iniquitous of such practices as seen all over the TV national news.These companies bring in been either sold or closed down after the hearings on Capitol Hill. Currently, In order to resolve this crisis, banks have drastically changed their lending practice and the closure of failing banks has indisposeded down. Corporate banks were also beginning to receive stimulant drug funds to save them from failing. The government found themselves in a grade of using 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, barely devised a plan to prevent failure. Therefore, banks had to pay back the loans in the billions, but were not charged interest if they paid the funds back early. The pocket-sized to mid-size banks were left to fail, because they were not too big to fail. A double regulation was shown to small businesses the backbone of America (http//economics. bout. com/).A bank of ineffective practices has shown small mom and pop banks they should not try to compete with Corporate Banking in America. They are not going to be bailed out, and allowed to fail. These 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/savings 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 given the stimulus funds instead of the banking institutions? What large-minded of economic boost would banks have, if the citizens were given stimulus funds? How does the government even up who receives funds to survive a financial set back? wherefore are parts of corporate America deemed too big to fail?