What Causes a Bank to Fail and the Bank Liquidation Process

Bank failures are a major topic of concern in this economy. Banks fail for two basic reasons, lack of liquidity, or lack of capital. Liquidity is the cash that a bank either has on hand in their vault or in another bank account. Banks also have lines of credit with other banks, the Federal Reserve Bank or Federal Home Loan Bank. These lines must be secured with collateral which can be investment...Read On