Here is a brief illustration of the number of bank failures that I calculated per the FDIC public listing.
This metric is a lagging indicator of economic downturn,
as you can see from the years preceding the last Great Financial Crisis of 2008
– 2010. It’s also a lagging indicator when the economy has begun to improve.
Said another way, the years preceding an economic downturn is marked by a
relatively low number of bank failures; and the years after the economy has
begun to improve there is still relatively high number of bank failures.
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