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I was intrigued by your post and this fdic insurance thing. Trying to see what their payouts have been over the years and how severe things can get. I came across their website about previous bank failures in past 20 years.
It happens often but not too often and most banks that failed are small banks anyways. Year with most banks was 2010 and with most money was 2008.
So I found this article from a few years back which is likely still accurate at least for #1. Biggest bank failure ever was Washington Mutual back in September 2008 for 307 billion. It got bought out by JPM aka Chase so the FDIC didn't have to pay.
The 15 Biggest Bank Failures in US History
These banks had billions in assets, but they still went under.www.gobankingrates.com
the FED (/central banks) bailed out the banking system above the head of the FDIC/ETC in period-2008 in the USA, UK, Germany, France .. they did this because the various deposit insurance bodies did not have enough money and a run on the entire banking system was a real possibility.
in the absence of that direct shoring up of the banking system incl. individual banks there would be a lot more to add to that list.
"Too big to fail" (TBTF) and "Too big to jail" is a theory in banking and finance that asserts that certain corporations, particularly financial institutions, are so large and so interconnected that their failure would be disastrous to the greater economic system, and that they therefore must be supported by governments when they face potential failure.[1] The colloquial term "too big to fail" was popularized by U.S. Congressman Stewart McKinney in a 1984 Congressional hearing, discussing the Federal Deposit Insurance Corporation's intervention with Continental Illinois.[2] The term had previously been used occasionally in the press,[3] and similar thinking had motivated earlier bank bailouts.[4]"
Too big to fail - Wikipedia
en.wikipedia.org
post all of this FDIC insurance went from 100K to 250K and FDIC lending limit went up to ~500bn IIRC.
1. Washington Mutual Bank
The largest bank failure ever occurred when Washington Mutual Bank went under in 2008. At the time, it had about $307 billion in assets. During the uncertainty of the banking crisis, however, Washington Mutual experienced a bank run where customers withdrew almost $17 billion in assets in less than 10 days. Washington Mutual didn’t receive any government bailouts and instead was seized and sold to JP Morgan for $1.9 billion, so the FDIC didn’t have to pay anything out of its reserve fund related to the bank’s closing.
- Assets: $307.02 billion
- Deposits: $188.26 billion
- Failure Date: Sept. 25, 2008
So then that leads us to #2.
2. IndyMac Bank, FSP
IndyMac became a major player in the banking world during the real estate boom of the early 2000s by specializing in loans that didn’t require borrowers to produce much in the way of income or asset verification. If home prices rose, that wasn’t a big deal because the bank could simply foreclose and recoup its loan amount by reselling the house. But when real estate prices fell, IndyMac’s losses grew. At the time of its closing, IndyMac was the largest bank failure in U.S. history — though it would only hold that title for a few months. The failure cost the FDIC approximately $9 billion.
- Assets: $30.70 billion
- Deposits: $18.94 billion
- Failure Date: July 11, 2008
Failure cost the FDIC approximately $9 billion. Going up the list, I don't see any other failures for higher than that amount. So the 307 billion bank was bought out by another bank and the second highest bank cost them 9 billion. Here's what I'm wondering,
Top 10 biggest US banks by assets in 2024: Data drop
How big are America's largest banks? EMARKETER has compiled a list of top US banks by assets so you can see the major players in the financial industry.www.insiderintelligence.com
Rank Bank Name Total Assets 1 JPMorgan Chase $2.87 Trillion 2 Bank of America $2.16 Trillion 3 Wells Fargo & Co. $1.75 Trillion 4 Citigroup $1.65 Trillion 5 U.S. Bancorp $530.50 Billion 6 Truist Financial Corporation $488.02 Billion 7 PNC Financial Services $457.45 Billion 8 TD Bank $388.34 Billion 9 Capital One $360.26 Billion 10 Bank of New York Mellon Corp. $349.43 Billion
How they gonna save a top ten bank if one of them fails? Is Chase gonna be able to buy out Bank of New York if it fails like it did with Washington Mutual back then? What about if BOA or Wells Fargo fail? The FDIC gonna be prepared for something major like that?
When ascertaining the banks position you have to net out liabilities vs assets. Once that unwinding is all done the list of liabilities can shrink considerably.
Saying that most of the biggest banks are considered "Too Big To Fail" because of widespread "Contagion" of an unordered unwind.
you posted this and hit submit and discuss finances all the time here, i feel duped 
