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A correction to the original has been added: $100,000 , should have read, $100 billion.

December 27, 2008 (LPAC)--2008 was a horrible year for the U.S. banking system, with bank failures hitting an all-time, when ranked by assets and deposits. During the year, 25 banks and thrifts were closed, with total assets of $373 billion and total deposits of $235 billion. This easily surpasses the highs of the mid 1980s-early 1990s crisis, when 534 banks and thrifts were closed, with assets of $164 billion and deposits of $138 billion. [Figure 1]

The 2008 totals are for banks which were closed by regulators and put into receivership through the FDIC, but do not include the nearly 200 banks which were given assistance through the TARP bailout plan. including Citigroup, which received an additional bailout in November. Were these banks included counted as failures, the assets and deposits would both be in the trillions of dollars.

One big difference between today and the mid-1980s to early 1990s crisis is the considerable consolidation which has occurred in the interim. Bank in the 1980s, some states still prohibited branch banking, such that every bank had to be individually chartered, compared today where many local banks are but branches of big banks located elsewhere. Today, we have three U.S. banks with more than $1 trillion in assets, whereas in 1989, at the peak of the previous crisis, the largest bank had just $227 billion in assets and only two banks topped the $100 billion level.

The U.S. banking system "survived" 2008 only because of an extraordinary series of bailout actions by the Treasury and the Federal Reserve totaling well over $8 trillion in capital injections, loans and guarantees. 2009 will not be so kind to the banks.