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Corresponding Author:
Richard J. Cebula, Davis College of Business, Jacksonville University, Jacksonville, Florida, USA

Jiayi Xu, Mount St. Joseph University, Cincinnati, Ohio, USA

A Brief Survey of Recent Studies of Bank Failures in the U.S.

Volume 76 - Issue 2, May 2023
(pp. 265-274)
JEL classification: G21; G32; G33
Keywords: Banking; Bank Failures; U.S. Banks; Bank Financial Ratios; Balance Sheet Data


This study provides a brief review of several recently published papers that attempt to identify factors that have influenced the failure rate of commercial banks in the U.S. In the effort to provide more useful/contemporary insights, the focus is on studies of bank failures published in the year 2000 and thereafter. Most of the studies emphasize micro-level causal factors, although certain studies direct attention to macro-level analysis. Moreover, there is an effort, albeit only modest, to identify factors affecting the bank failure rate of minority-owned banks; this fact suggests an arguably useful emphasis for future research. 

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Bahaj, S. and F. Malherbe (2020), “The Forced Safety Effect: How Higher Capital Requirements can Increase Bank Lending”, Journal of Finance, 75(6), 3013-3053.

Carmona, P., F. Climent and A. Momparler (2019), “Predicting Failure in the U.S. Banking Sector: An Extreme Gradient Boosting Approach”, International Review of Economics & Finance, 61(2), 304-323.

Cebula, R.J. (2010), “Determinants of Bank Failures in the U.S. Revisited”, Applied Economics Letters, 17(13), 1313-1317.

Cebula, R.J., W. Gillis, S.C. McCrary and D. Capener (2016), “New Evidence on the Impact of Economic Conditions and Banking Legislation on the Bank Failure Rate in the US, 1970 to 2014”, Journal of Financial Economic Policy, 8(3), 364-376.

Cole, R.A. and L.J. White (2012), “Déjà vu All Over Again: The Causes of U.S. Commercial Bank Failures this Time Around”, Journal of Financial Services Research, 42(1-2), 5-29.

Cox, R.A.K. and G. Wang (2014), “Predicting the US Bank Failure: A Discriminant Analysis”, Economic Analysis and Policy, 44(2), 202-211.

Cox, R.A.K., G.W. Kimmel and G.W.Y. Wan (2017), “Proportional Hazards Model of Bank Failure: Evidence from USA”, Journal of Economic & Finance Studies, 5(3), 35-45.

Kashian, R. and R. Drago (2017), “Minority-Owned Banks and Bank Failures after the Financial Collapse”, Economic Notes, 46(1), 5-36.

Li, G, L.W. Sanning and S. Shaffer (2011), “Forecasting Bank Failures: Timeliness versus Number of Failures”, Applied Economics Letters, 18(16), 1549-1552.

Lu, W. and D.A. Whidbee (2013), “Bank Structure and Failure during the Financial Crisis”, Journal of Financial Economic Policy, 5(3), 281-299.

Lu, W. and D.A. Whidbee (2016), “US Bank Failure and Bailout during the Financial Crisis: Examining the Determinants of Regulatory Intervention Decisions”, Journal of Financial Economic Policy, 8(3), 316-347.

Rockoff, H. (2021), “Oh, how the Mighty Have Fallen: The Bank Failures and Near Failures that Started America’s Greatest Financial Panics”, The Journal of Economic History, 81(2), 331-358.

Shaffer, S. (2012), “Bank Failure Risk: Different now?” Economics Letters, 116(3), 613-616.

Sun, J., D. Wu and X. Zhao (2018), “Systematic risk factors and bank failures”, Journal of Economics and Business, 98(July-August), 1-18.

Wheelock, D.C. and P.W. Wilson (2000), “Why do Banks Disappear? The Determinants of U.S. Bank Failures and Acquisitions”, The Review of Economics and Statistics, 82(1), 127-138.

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Institute for International Economics
of the Genoa Chamber of Commerce

Istituto di Economia Internazionale
Camera di Commercio di Genova
Via Garibaldi, 4 (III piano) - 16124 Genova (Italy)