WHY BANKS FAIL?

Abstract

Banks are very important institutions; they take a major role in the economic aspect. The thought of bank failure led to a concern for governments, shareholders, depositors, and the public. This research dissertation will clarify the most common reasons for financial problems or banks failure. In order to answer and resolve the research question, which is why banks fail? Explaining why banks failure is different than other businesses failure, and how that can impact the nation growth rates. Furthermore, examine the internal and external factors to know the most affective between them. However, it cannot be only one reason that causes the failure of banks. Using ratio and regression analysis methods to calculate and forecast risks before happening. Collecting quantitative data through online survey questionnaire, that allowed the author to view respondents’ opinion, then analyze and interpret the responds. Presenting the reasons of bank failure as findings and discuss the most affective two, which are they: risk management from internal factors and clients from the external factors.