There were four bank failures in 2020. This was the same number as in 2019. The median number of failures since the FDIC was established in 1933 was 7 – so 4 failures in 2020 was below the median.
The great recession / housing bust / financial crisis related failures have been behind us for several years.
The first graph shows the number of bank failures per year since the FDIC was founded in 1933.
Click on graph for larger image.
Typically about 7 banks fail per year.
Note: There were a large number of failures in the ’80s and early ’90s. Many of these failures were related to loose lending, especially for commercial real estate. Also, a large number of the failures in the ’80s and ’90s were in Texas with loose regulation.
Even though there were more failures in the ’80s and early ’90s than during the financial crisis, the financial crisis was much worse (larger banks failed and were bailed out).
The second graph includes pre-FDIC failures. In a typical year – before the Depression – 500 banks would fail and the depositors would lose a large portion of their savings.
Then, during the Depression, thousands of banks failed. Note that the S&L crisis and recent financial crisis look small on this graph.