The impact of the Financial Crisis on Banking Industry Research Paper

The impact of the Financial Crisis on Banking Industry - Research Paper Example In 2009, the “Federal Deposit Insurance Corporation” failed almost 305 banks. Even though this is comparatively small proportion of the entire banks, the tendency that this reveals is the actual reason for concern. This amount is greater than 12 times the amount, 25, which failed in the year 2008. Among these banks which were forced to shut their doors in 2008 was “Washington Mutual”; the leading bank to date which has been compelled to shut their doors. Nevertheless, they were capable to get away total amount of liquidation by being engrossed by “JP Morgan Chase”. This benefited the “JP Morgan Chase” since this gave them a trail on the west-shore which they had been requesting for some time (Bexley et al., 2011, p. 2). Due to these negative externalities, the problem of credit crunch has been generated which has reduced the amounts of investment and investable funds across the globe.