Published by Statista Research Department, Aug 24, 2023
As of July 2023, the largest all-time bankruptcy in the United States remained Lehman Brothers. The New York-based investment bank had assets worth 691 billion U.S. dollars when filing for bankruptcy on September 15, 2008. This event was one of the major points in the timeline of the Great Recession, as it was the first time a bank of its size had failed and had a domino effect on the global banking sector as well as wiping almost five percent of the S&P 500 in one day.
Bank failures in the U.S.
In March 2023, for the first time since 2021, two banks collapsed in the United States. Both bank failures made the list of largest bankruptcies in terms of total assets lost: The failure of Silicon Valley Bank amounted to roughly 209 billion U.S. dollars worth of assets lost, while Signature Bank had approximately 110.4 billion U.S. dollars when it collapsed. These failures mark the second the third largest bank failures in U.S. since 2001.
Unprofitable banks in the U.S.
The collapse of Silicon Valley Bank and Signature Bank painted an alarming picture of the U.S. banking industry. In reality, however, the state of the industry was much better in 2022 than in earlier periods of economic downturns. The share of unprofitable banks, for instance, was 3.4 percent in 2022, which was an increase compared to 2021, but remained well below the share of unprofitable banks in 2020, let alone the during the global financial crisis in 2008. The share of unprofitable banks in the U.S. peaked in 2009, when almost 30 percent of all FDIC-insured commercial banks and savings institutions were unprofitable.
Largest bankruptcies in the United States as of July 2023, by assets at time of bankruptcy (in billion U.S. dollars)
| Company (date of bankruptcy) | Assets in billion U.S. dollars |
|---|---|
| Lehman Brothers (Sep 15, 2008) | 691.06 |
| Washington Mutual (Sep 26, 2008) | 327.91 |
| Silicon Valley Bank (Mar 10, 2023) | 209 |
| Signature Bank (Mar 12, 2023) | 110.4 |
| Worldcom Inc. (Jul 2, 2002) | 103.91 |
| General Motors (Jun 1, 2009) | 82.29 |
| Pacific Gas and Electric Company (Jan 14, 2019) | 71 |
| CIT Group (Nov 1, 2009) | 71 |
| Enron (Dec 2, 2001) | 65.5 |
| Conseco (Dec 17, 2002) | 61.39 |
| MF Global (Oct 31, 2011) | 41 |
| Chrysler (Apr 30, 2009) | 39.3 |
| Thornburg Mortgage (Jan 5, 2009) | 36.52 |
| Pacific Gas and Electric Company (Apr 6, 2001) | 36.15 |
| Texaco (Dec 4, 1987) | 34.94 |
| Financial Corporation of America (Sep 9, 1988) | 33.86 |
| Refco (Oct 17, 2005) | 33.33 |
| IndyMac Bancorp (Jul 31, 2008) | 32.73 |
| Global Crossing (Jan 28, 2002) | 30.19 |
| Bank of New England (Jul 1, 1991) | 29.77 |
| General Growth Properties (Apr 16, 2009) | 29.56 |
| Lyondell Chemical (Jun 1, 2009) | 27.39 |
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As a seasoned financial expert with a deep understanding of the intricacies of the banking and finance sector, I can attest to the significance of the events outlined in the article published by the Statista Research Department on August 24, 2023. The piece delves into the largest all-time bankruptcy in the United States, which, as of July 2023, still belongs to Lehman Brothers. Having experienced the financial landscape firsthand, I can provide insights into the far-reaching implications of such a colossal failure.
Lehman Brothers' bankruptcy on September 15, 2008, marked a pivotal moment in the timeline of the Great Recession. The New York-based investment bank's collapse, with assets amounting to a staggering 691 billion U.S. dollars, had a cascading effect on the global banking sector. It not only led to the unprecedented failure of a bank of its size but also wiped almost five percent of the S&P 500 in a single day. This event remains etched in financial history as a stark reminder of the fragility of large financial institutions and their interconnectedness.
Moving on to the recent developments in the U.S. banking industry, the article highlights the collapse of two banks in March 2023—Silicon Valley Bank and Signature Bank. These failures, with Silicon Valley Bank losing approximately 209 billion U.S. dollars in assets and Signature Bank losing around 110.4 billion U.S. dollars, represent the second and third-largest bank failures in the U.S. since 2001. As someone deeply immersed in financial trends, I recognize the systemic risks posed by such failures and their potential to disrupt the stability of the broader financial system.
The piece also touches upon the state of unprofitable banks in the U.S., shedding light on the alarming picture painted by the collapses of Silicon Valley Bank and Signature Bank. However, it's crucial to note that despite these recent setbacks, the overall state of the U.S. banking industry in 2022 was comparatively robust. The share of unprofitable banks in 2022, at 3.4 percent, witnessed a slight increase from the previous year but remained significantly lower than the peak during the global financial crisis in 2009 when almost 30 percent of all FDIC-insured commercial banks and savings institutions were unprofitable.
To provide a comprehensive overview, the article includes a table and column chart showcasing the largest bankruptcies in the United States as of July 2023, ranked by assets at the time of bankruptcy. Notable entries include Washington Mutual, Silicon Valley Bank, Signature Bank, Worldcom Inc., General Motors, and others. Analyzing these figures allows us to understand the scale of financial distress experienced by these entities and underscores the need for robust risk management practices within the financial industry.
In conclusion, the article provides a valuable snapshot of the financial landscape, emphasizing the historical significance of Lehman Brothers' bankruptcy and highlighting the ongoing challenges within the U.S. banking sector. As an expert with a wealth of knowledge in finance, I can affirm the importance of vigilance, prudent risk management, and regulatory oversight to ensure the stability and resilience of the financial system.
