The collapse of First Republic Bank and subsequent seizure by US regulators on Monday marks the largest bank failure since the 2007-2008 financial crisis. This has led to concerns about the impact on the US financial system and the wider global economy.
Looking back at previous crises, it becomes clear that bank failures are not a new phenomenon. Here is a brief overview of some of the most significant retail bank failures since the 2007-2008 financial crisis:
- HBOS (Britain): September 17, 2008. With assets totaling £690 billion (equivalent to $866 billion), HBOS was the largest bank failure in British history. The bank was acquired by Lloyds Banking Group with the help of a government bailout.
- Washington Mutual (United States): September 19, 2008. The largest savings and loan association in the US, with $307 billion in assets, failed due to its exposure to the subprime mortgage market. Its banking operations were sold to JPMorgan Chase.
- IndyMac (United States): July 11, 2008. IndyMac had $32 billion in assets and was one of the largest savings and loans in the US. It was seized by the Federal Deposit Insurance Corporation (FDIC) and sold to a private equity group.
- Sachsen LB (Germany): August 26, 2007. Sachsen LB, a regional bank in Germany, had €67 billion in assets (equivalent to $74 billion) and failed due to its exposure to US subprime mortgages. It was acquired by Landesbank Baden-Württemberg.
It is important to note that the above list is not exhaustive and that there have been other significant bank failures across the globe. Furthermore, it is not just retail banks that have failed in recent years. Investment banks such as Lehman Brothers, which had $639 billion in assets, also failed during the 2008 crisis.
