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About This Event
This market will resolve to "Yes" if any US bank fails between this market's creation and the listed date 11:59 PM ET (according to the FDIC's "Failed Bank List"). Otherwise, this market will resolve to "No."
For this market to resolve to "Yes", the bank's closing date as listed by the FDIC must be within this market's above-specified timeframe. If there is a potential bank failure within this market's timeframe and the FDIC "Failed Bank List" has not been updated yet, this market may remain op
AI-generated analysis based on market data. Not financial advice.
This prediction market asks whether any United States bank will fail between the market's creation date and April 30, 2024, at 11:59 PM Eastern Time. A bank failure is defined by the Federal Deposit Insurance Corporation's (FDIC) official 'Failed Bank List.' The market resolves to 'Yes' only if the FDIC lists a bank closure date within this specific timeframe. This topic directly measures confidence in the stability of the U.S. banking system over a short-term horizon. Interest in this question surged following the collapse of Silicon Valley Bank, Signature Bank, and First Republic Bank in early 2023, which were the largest bank failures since the 2008 financial crisis. These events exposed vulnerabilities related to interest rate risk, uninsured deposit concentrations, and rapid deposit outflows enabled by digital banking. Market participants monitor indicators like commercial real estate exposure, unrealized losses on securities portfolios, and regulatory actions to assess failure risk. The outcome serves as a real-time gauge of systemic stress and the effectiveness of regulatory interventions implemented after the 2023 turmoil.
Historical Context
The modern framework for U.S. bank failures was established during the Great Depression with the creation of the FDIC in 1933. The FDIC's deposit insurance fund was designed to maintain public confidence and prevent bank runs. The most severe period for bank failures in recent history was the savings and loan crisis of the 1980s and early 1990s, which resulted in the failure of 1,043 banks between 1980 and 1994. The Financial Crisis of 2008-2009 saw another major wave, with 489 banks failing between 2008 and 2012, including Washington Mutual, the largest failure in U.S. history. Following that crisis, the Dodd-Frank Act of 2010 imposed stricter regulations on larger banks, leading to a period of relative stability with only 4 bank failures from 2018 through 2022. This calm was shattered in March 2023 with the sudden collapses of Silicon Valley Bank and Signature Bank, followed by First Republic Bank in May 2023. These events, driven by interest rate hikes and social media-fueled bank runs, represented the second, third, and fourth largest bank failures in U.S. history, renewing focus on failure risks.
Why It Matters
A bank failure, even a small one, can trigger broader economic consequences. It can disrupt credit availability for businesses and consumers in the affected bank's community, potentially slowing local economic activity. If a failure is perceived as symptomatic of wider problems, it can spark contagion, where depositors lose confidence in similar banks and withdraw funds rapidly. This was demonstrated in March 2023, when fears spread from Silicon Valley Bank to other regional institutions. Such contagion can force healthy banks to sell assets at a loss to meet withdrawals, weakening the entire financial system and potentially requiring costly government intervention. For the public, a failure tests the FDIC's deposit insurance guarantee. While insured deposits are protected, uninsured depositors and creditors can face losses, and the resolution process can cause temporary disruptions in accessing funds. Politically, bank failures often lead to congressional hearings, regulatory scrutiny, and debates over the adequacy of existing financial rules.
Current Status
As of early 2024, the U.S. banking system has stabilized from the acute stress of March 2023, but regulators and investors remain focused on persistent risks. The most frequently cited concern is exposure to commercial real estate, particularly office loans, which are suffering from high vacancy rates and falling values. Several regional banks have reported increased provisions for loan losses in this sector. The FDIC continues to report that net income for the banking industry remains high, but also notes that the number of 'problem banks' is rising. Markets are closely watching for any signs of deposit flight from smaller institutions and monitoring the Federal Reserve's progress on proposed stricter capital rules.
Frequently Asked Questions
What happens to my money if my bank fails?
The FDIC guarantees deposits up to $250,000 per depositor, per insured bank, for each account ownership category. Insured depositors typically regain access to their funds within one business day, often through an account at a assuming bank. Uninsured deposits (amounts over $250,000) are not guaranteed and may incur losses.
How does the FDIC define a bank failure?
The FDIC defines a failure as when a bank is closed by its chartering authority (state or federal regulator) because it is unable to meet its obligations to depositors and others. The FDIC is then appointed as receiver to resolve the institution, typically by selling its assets and deposits to another bank or by paying depositors directly.
What was the last U.S. bank to fail before April 2024?
The most recent failure before 2024 was Citizens Bank of Sac City, Iowa, which was closed by the Iowa Division of Banking on November 3, 2023. The FDIC arranged for its deposits and most assets to be assumed by Iowa Trust & Savings Bank.
Which banks failed in 2023?
In 2023, five FDIC-insured banks failed: Silicon Valley Bank (March 10), Signature Bank (March 12), First Republic Bank (May 1), Heartland Tri-State Bank (July 28), and Citizens Bank (November 3). The first three were among the four largest bank failures in U.S. history.
What causes a bank to fail?
Banks typically fail due to a combination of insolvency and illiquidity. Insolvency occurs when a bank's liabilities exceed its assets, often from large loan losses or a collapse in asset values. Illiquidity happens when a bank cannot meet immediate cash demands from depositors, which can trigger a classic bank run.
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Updated Mar 27, 2026
Educational content is AI-generated and sourced from Wikipedia. It should not be considered financial advice.
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