Only 1 Tiny Bank Failed During Fall Subprime Crisis
The chart above is from the FDIC's website. Notice that despite the "subprime crisis," there was only 1 bank failure in the fourth quarter of 2007, out of almost 9,000 FDIC-insured institutions. It's true that subprime troubles have fallen much harder on other sectors of the financial sector, but it's also good to know that the commercial banking sector is healthy, and survived a year of credit trouble with almost no bank failures.
The only bank to fail in the fall of 2007 was the tiny Miami Valley Bank in Lakeview, Ohio, with just $87 million in assets, or 5% of the size of the average bank, which has $1.5 billion in assets. For the entire year, only 3 banks failed in 2007; and not a single bank failed in either 2005 or 2006, as I have previously documented.