Definitions from the Web
Bank Failure
Definition:
Bank failure refers to the complete inability of a financial institution to meet its obligations to depositors and creditors, resulting in its closure and dissolution.
Senses/Usages:
- Financial Sense: Bank failure can occur due to insolvency or liquidity issues, leading to the closure and liquidation of the bank.
- Consequences: It results in the loss of depositors' funds and can have severe ramifications on the economy and public confidence in the banking system.
- Historical Perspective: Bank failures have been witnessed throughout history during times of economic crisis, for instance, the Great Depression in the 1930s.
Sample Sentences:
- The recent economic downturn led to a significant increase in bank failures.
- During the Great Recession, numerous banks faced the threat of bank failure due to their exposure to risky assets.
- Bank failures not only impact depositors but also have far-reaching consequences on the overall financial stability of a nation.
- The government implemented strict regulations to prevent future bank failures and to safeguard the interests of consumers.
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