SVB Clients Get a Painful Lesson: Bank Failures Are Common
Such a long time without news of a bank collapse seems to have lulled depositors into a false sense of security.
The biggest US bank failure in more than a decade.
Photographer: Bloomberg/BloombergBank failures are surprisingly common: There have been 565 of them in the US since the turn of the millennium. Many occurred in the aftermath of the global financial crisis, but even in more benign periods, banks have gone bust. Between 2011 and 2020, banks collapsed at a rate of around two a month.
What makes Silicon Valley and Signature Bank special is not only their size — they are the second- and third-largest bank failures in US history — but also how much time elapsed since a bank before them failed. Prior to Silicon Valley Bank entering receivership on Friday, the last bank to fail was Almena State Bank, of Almena, Kansas, in October 2020. The 868-day lull between the two failures was the second-longest stretch on record, the longest being in the run-up to the financial crisis.