Depositors "run" on a failing New York City bank in an effort to recover their money, July 1914

A bank failure occurs when a bank is unable to meet its obligations to its depositors or other creditors because it has become insolvent or too illiquid to meet its liabilities.[1] A bank usually fails economically when the market value of its assets declines to a value that is less than the market value of its liabilities. The insolvent bank either borrows from other solvent banks or sells its assets at a lower price than its market value to generate liquid money to pay its depositors on demand. The inability of the solvent banks to lend liquid money to the insolvent bank creates a bank panic among the depositors as more depositors try to take out cash deposits from the bank. As such, the bank is unable to fulfill the demands of all of its depositors on time. A bank may be taken over by the regulating government agency if its shareholders' equity are below the regulatory minimum.

Depositors "run" on a failing New York City bank in an effort to recover their money, July 1914

The failure of a bank is generally considered to be of more importance than the failure of other types of business firms because of the interconnectedness and fragility of banking institutions. Research has shown that the market value of customers of the failed banks is adversely affected at the date of the failure announcements.[2] It is often feared that the spill over effects of a failure of one bank can quickly spread throughout the economy and possibly result in the failure of other banks, whether or not those banks were solvent at the time as the marginal depositors try to take out cash deposits from these banks to avoid from suffering losses. Thereby, the spill over effect of bank panic or systemic risk has a multiplier effect on all banks and financial institutions leading to a greater effect of bank failure in the economy. As a result, banking institutions are typically subjected to rigorous regulation, and bank failures are of major public policy concern in countries across the world.
Bankning nochorligi bankning omonatchilar yoki boshqa kreditorlar oldidagi majburiyatlarini bajara olmasligi, chunki u to'lovga layoqatsiz yoki o'z majburiyatlarini bajarish uchun juda likvid bo'lib qolganda yuzaga keladi.[1] Bank, odatda, agar aktivlarining bozor qiymati uning majburiyatlarining bozor qiymatidan pastroq qiymatga tushib qolsa, iqtisodiy jihatdan muvaffaqiyatsizlikka uchraydi. To'lovga layoqatsiz bank o'z omonatchun boshqa to'lovga qodir banklardan qarz oladi yoki o'z aktivlarini bozor qiymatidan arzonroq narxda sotadi. To‘lovga layoqatli banklarning to‘lovga qodir bo‘lmagan bankka likvid pul mablag‘larini qarzga bera olmasligi omonatchilar orasida bank panikasini keltirib chiqarmoqda, chunki ko‘proq omonatchilar bankdan naqd pul omonatlarini olishga harakat qilmoqda. Shunday qilib, bank barcha omonatchilarning talablarini o'z vaqtida bajara olmaydi. Bank, agar uning aktsiyadorlik kapitali tartibga soluvchi minimal darajadan past bo'lsa, nazorat qiluvchi davlat organi tomonidan qabul qilinishi mumkin.

Omonatchilar o'z pullarini qaytarish uchun Nyu-Yorkdagi muvaffaqiyatsiz bankda "yugurishadi", 1914 yil iyul

Bank muassasalarining o'zaro bog'liqligi va zaifligi tufayli bankning muvaffaqiyatsizligi, odatda, boshqa turdagi biznes firmalarining muvaffaqiyatsizligiga qaraganda muhimroq deb hisoblanadi. Tadqiqotlar shuni ko'rsatdiki, muvaffaqiyatsizlikka uchragan banklar mijozlarining bozor qiymati muvaffaqiyatsizlik haqida e'lon qilingan kunga salbiy ta'sir qiladi.[2] Ko'pincha bitta bankning muvaffaqiyatsizligi oqibatlari butun iqtisodiyotga tez tarqalishi va boshqa banklarning muvaffaqiyatsizlikka olib kelishi mumkin, deb qo'rqishadi, chunki marjinal omonatchilar naqd pul olishga harakat qiladilar. zarar ko'rmaslik uchun ushbu banklarning depozitlari. Shunday qilib, bank vahima yoki tizimli tavakkalchilikning tarqalishi barcha banklar va moliya institutlariga multiplikativ ta'sir ko'rsatadi, bu esa bank inqirozining iqtisodiyotga ko'proq ta'siriga olib keladi. Natijada, bank muassasalari odatda qat'iy tartibga solinadi va bank muvaffaqiyatsizliklari butun dunyo bo'ylab davlat siyosatining asosiy muammosi hisoblanadi.