Largest Bankruptcies in the United States
As of July 2023, the largest all-time bankruptcy in the United States remained Lehman Brothers. The New York-based investment bank had assets worth $691 billion U.S. dollars when filing for bankruptcy on September 15, 2008. This event was one of the major points in the timeline of the Great Recession, as it was the first time a bank of its size had failed and had a domino effect on the global banking sector as well as wiping almost five percent of the S&P 500 in one day.
In March 2023, for the first time since 2021, two banks collapsed in the United States. Both bank failures made the list of largest bankruptcies in terms of total assets lost: The failure of Silicon Valley Bank amounted to roughly $209 billion U.S. dollars worth of assets lost, while Signature Bank had approximately $110.4 billion U.S. dollars when it collapsed. These failures mark the second the third largest bank failures in U.S. since 2001.
The collapse of Silicon Valley Bank and Signature Bank painted an alarming picture of the U.S. banking industry. In reality, however, the state of the industry was much better in 2022 than in earlier periods of economic downturns. The share of unprofitable banks, for instance, was 3.4 percent in 2022, which was an increase compared to 2021, but remained well below the share of unprofitable banks in 2020, let alone during the global financial crisis in 2008. The share of unprofitable banks in the U.S. peaked in 2009, when almost 30 percent of all FDIC-insured commercial banks and savings institutions were unprofitable.