Bank Failures: Causes and Implications

The video explores the reasons behind bank failures, focusing on solvency and liquidity issues. It explains how banks manage their balance sheets, the risks of non-performing loans, and the importance of maintaining sufficient capital. The traditional banking model's vulnerabilities are discussed, including the impact of financial contagion. A case study on Barclays highlights the practical implications of these concepts.

How can a bank be technically solvent yet still face insolvency?

What is the impact of a speculative bubble on bank asset values?

Describe the importance of maintaining sufficient liquidity for banks.

What measures can banks take to prevent failures during economic downturns?