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Number of banks failed is less useful info than total size of the banks that failed. So far this year we are looking a lot closer to 2009 than 2020[0]. [0] ht

by phil21 4y ago

Number of banks failed is less useful info than total size of the banks that failed. So far this year we are looking a lot closer to 2009 than 2020[0]. [0] https://static01.nyt.com/images/2023/03/10/business/bank-failures-silicon-valley-collapse-promo/bank-failures-silicon-valley-collapse-promo-videoSixteenByNine3000.png https://static01.nyt.com/images/2023/03/10/business/bank-fai... Edit: wrong image linked

bko 4y ago
Here's an infographic and wiki. It's like forest fires, we shouldn't build fragility into the system by removing all risk and then rely on regulations to mitigate it. Hasn't worked in the past and will lead to more consolidation and bigger fires in the future. Remember in 08 the answer was to combine a bunch of banks and since then we've had no new banks created (besides Ally which was a spin off of an auto workers pension fund if i remember) https://en.m.wikipedia.org/wiki/List_of_largest_U.S._bank_failures https://en.m.wikipedia.org/wiki/List_of_largest_U.S._bank_fa... https://old.reddit.com/r/dataisbeautiful/comments/11p3555/oc_size_of_bank_failures_since_2000/ https://old.reddit.com/r/dataisbeautiful/comments/11p3555/oc...
- phil21 4y ago
  I certainly don't agree with it. I totally agree all this sort of can-kicking does is make the explosion an order of magnitude larger down the line.
- BlueTemplar 4y ago
  « QE1 QE2, the lender of last resort is you QE3 QE4, increase M1 even more! 𝅘𝅥𝅯 » https://youtu.be/CzvQxQYKO88?t=255 https://youtu.be/CzvQxQYKO88?t=255
kimburgess 4y ago
For some more fairly excellent data viz: https://yarn.pranshum.com/banks https://yarn.pranshum.com/banks.
Retric 4y ago
That estimate is misleading as SV failed after people pulled 45 billion out. It wasn’t a 200 billion dollar bank when it failed and people didn’t lose 200 billion dollars. We are at ~1.3 bank failures per month in 2023 which is much closer to 2020’s 0.3/month than 2009’s 11.7 banks failing per month. That IMO says more about the rest of the year than the size of the banks that failed.
- epgui 4y ago
  The parent comment just made the point that you need to normalize for the size of the bank, not for the number of banks per year. Your comment takes the annual frequency and divides it by 12 to get an average monthly frequency, adding nothing to the argument of the grandparent comment.
  - Retric 4y ago
    They suggested you should normalize for the size of the bank but didn’t support it. They even used non inflation adjusted numbers. Maximum assets under control don’t correlate with actual losses especially when people pulled money out before the collapse. It’s a completely meaningless number on it’s own.
    - phil21 4y ago
      Certainly very valid criticisms. To be fair, I specifically was trying to ballpark it and this graph does not contain the Signature failure yet so I think it is a fair representation of this particular metric. I also think it's a good point that a dollar is not necessarily equal to another dollar in this context. But the same can be said for individual banks as well.
      - Retric 4y ago
        That’s fair, I do think it’s reasonable to compare losses or the size of bailouts. But we just don’t have that info yet.
heisenbit 4y ago
And that graph is now missing Signature Bank with another 110B assets. We are getting into 2008 territory and the first quarter is not yet behind us.

by phil21 4y ago

bko 4y ago

Here's an infographic and wiki. It's like forest fires, we shouldn't build fragility into the system by removing all risk and then rely on regulations to mitigate it. Hasn't worked in the past and will lead to more consolidation and bigger fires in the future. Remember in 08 the answer was to combine a bunch of banks and since then we've had no new banks created (besides Ally which was a spin off of an auto workers pension fund if i remember) https://en.m.wikipedia.org/wiki/List_of_largest_U.S._bank_failures https://en.m.wikipedia.org/wiki/List_of_largest_U.S._bank_fa... https://old.reddit.com/r/dataisbeautiful/comments/11p3555/oc_size_of_bank_failures_since_2000/ https://old.reddit.com/r/dataisbeautiful/comments/11p3555/oc...

phil21 4y ago
I certainly don't agree with it. I totally agree all this sort of can-kicking does is make the explosion an order of magnitude larger down the line.
BlueTemplar 4y ago
« QE1 QE2, the lender of last resort is you QE3 QE4, increase M1 even more! 𝅘𝅥𝅯 » https://youtu.be/CzvQxQYKO88?t=255 https://youtu.be/CzvQxQYKO88?t=255

kimburgess 4y ago

For some more fairly excellent data viz: https://yarn.pranshum.com/banks https://yarn.pranshum.com/banks.

Retric 4y ago

That estimate is misleading as SV failed after people pulled 45 billion out. It wasn’t a 200 billion dollar bank when it failed and people didn’t lose 200 billion dollars. We are at ~1.3 bank failures per month in 2023 which is much closer to 2020’s 0.3/month than 2009’s 11.7 banks failing per month. That IMO says more about the rest of the year than the size of the banks that failed.

epgui 4y ago
The parent comment just made the point that you need to normalize for the size of the bank, not for the number of banks per year. Your comment takes the annual frequency and divides it by 12 to get an average monthly frequency, adding nothing to the argument of the grandparent comment.
- Retric 4y ago
  They suggested you should normalize for the size of the bank but didn’t support it. They even used non inflation adjusted numbers. Maximum assets under control don’t correlate with actual losses especially when people pulled money out before the collapse. It’s a completely meaningless number on it’s own.
  - phil21 4y ago
    Certainly very valid criticisms. To be fair, I specifically was trying to ballpark it and this graph does not contain the Signature failure yet so I think it is a fair representation of this particular metric. I also think it's a good point that a dollar is not necessarily equal to another dollar in this context. But the same can be said for individual banks as well.
    - Retric 4y ago
      That’s fair, I do think it’s reasonable to compare losses or the size of bailouts. But we just don’t have that info yet.

heisenbit 4y ago

And that graph is now missing Signature Bank with another 110B assets. We are getting into 2008 territory and the first quarter is not yet behind us.