Assignment: Preventing Bank Failures From 2008 - 2011, 430 banks and thrifts went into receivership, with about an $80bn net impact on the FDIC Deposit Insurance fund As of 2011Q4, the FDIC’s problem bank list had 813 institutions with total assets $320bn
Modeling: Use the sample data to answer: • What was the biggest bank at the end of 2009? • What trends do you observe in net chargeoffs over time? • Is there a correlation between level of profitability of a bank’s investments in securities (here measured by fair value of investments over cost basis) and bank failure? • What are the top two predictors of bank failure? • Which banks are most likely to fail in the near future (and why)?