This prediction market asks whether any US bank will fail between the market's creation date and March 31, based on the Federal Deposit Insurance Corporation's official 'Failed Bank List.' A bank failure occurs when a financial institution cannot meet its obligations to depositors and creditors, typically leading to its closure by a state or federal banking regulator and subsequent takeover by the FDIC. The FDIC's list is the definitive public record of such events, documenting the institution's name, location, and the specific date it was closed. The market resolves to 'Yes' only if the FDIC lists a bank closure date within the specified timeframe, making the regulator's public disclosures the sole arbiter of the outcome. Interest in this market stems from ongoing concerns about the stability of the US banking system following several high-profile failures in 2023. The collapses of Silicon Valley Bank, Signature Bank, and First Republic Bank revealed vulnerabilities related to interest rate risk, uninsured deposit concentrations, and rapid growth strategies. While regulators implemented emergency measures and industry stress appears to have moderated, questions persist about the health of smaller and regional banks, particularly those with commercial real estate exposure or similar asset-liability mismatches. Market participants monitor FDIC quarterly banking profiles, Federal Reserve stress test results, and earnings reports from individual institutions for signals of distress. The question of another failure by March 31 focuses attention on whether the systemic pressures have been contained or if further instability lies ahead.

Historical Context

The modern era of US bank failures is often traced to the savings and loan crisis of the 1980s and early 1990s, when 1,043 thrifts failed between 1986 and 1995. The crisis led to the creation of the Resolution Trust Corporation and cost an estimated $160 billion. The period following the 2008 global financial crisis saw another wave of failures, with 489 banks collapsing between 2008 and 2012, including Washington Mutual, the largest failure in US history with $307 billion in assets. These events prompted the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, which established stricter capital and stress testing requirements for larger institutions. The decade from 2013 to 2022 was relatively quiet, with only 27 bank failures total, largely small community banks. This calm was shattered in March 2023 with the sudden collapse of Silicon Valley Bank, the second-largest bank failure in US history with $209 billion in assets. Its failure was followed within days by the closure of Signature Bank ($110 billion in assets) and in May by First Republic Bank ($229 billion in assets). These three failures in 2023 accounted for over 90% of the total assets lost in all US bank failures since 2008, marking a return to systemic banking stress not seen since the financial crisis.

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