Given last week’s announcement that IndyMac Bank was taken into FDIC receivership, I thought it would be interesting to take a look at the recent history of bank failures. Lo and behold, the FDIC has an entire page dedicated to this very topic. What follows is a graph of the number of bank failures by year since 2001.
As you can see, there was a spike during the bursting of the stock market bubble back in 2002, and it appears that things may once again be on the upswing. Note that 2008 numbers are based on year-to-date data. Assuming that things continue at the same pace, the total will climb into the neighborhood of nine failed banks. While this falls short of the 2002 numbers, it’s still pretty significant.
If you’re nervous, the best advice I can offer is to observe FDIC insurance limits ($100k per individual per institution). While you can’t control what happens in the banking industry, you can protect yourself. You might also want to check out my earlier rundown of the safest online banks, though the landscape is changing fast.