Why Do Banks Shut Down?

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Why Do Banks Shut Down?

Banks are very important in life especially in the modern time we live in today without them there would be no safe place to keep your money. Straight to the point in the year 2008 a lot of banks shut down because of the lack of money they had as you know this was also the time of the financial crisis, this also ties up to why the banks shut down in the first place. I discovered that the banks were not paying much attention to who they were loaning money too and because of that that, the people they loaned money to did not have enough cash to pay back and that seriosuly affected the banks. Now the banks could not loan anymore money and could not pay back the people they owed! As time went people did not want to keep money in the bank and therefore they had to close down.

A lot has changed since 2008 and banks and more alertive and and know how to handle their situations!

What Do You Think About This?

Comments (8)

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  • I think banks have shut down because people might have been stealing money from banks and also like you said people didnt have enough money to pay back what they have already spent. I think there should be banks because nowadays people really need to borrow money and now people have money to pay them back.

  • Thank you so much for sharing your opinion with me i really appreciate it :)

  • Firstly, can I just say I'm very excited to hear from another panda_bear! Back to the situation, I think that banks shut down because they loan to much money and then people can't afford to pay them back. Maybe one of the ways to deal with this is to shut down. Some one could just go
    "Argh! No one can pay me back. I'll just close and yay! Not my problem any more."
    I know it doesn't work like that and it becomes some one else's problem but humans are so selfish and lazy Thatcher might do that! I'm not being silly or anything because I know that if I was in that position, unless I was in a good mood, I would probably do that too!

  • That is a really good suggestion. Nowadays we need banks because thousands of people need to store their money somewhere. Maybe since it was the fianacial crisis, people didn’t trust banks. Also, banks couldn’t give you the money since it bankrupted so what the point of giving money? I’m very sorry that I might not understand this. I am one of the youngest in year 5.

  • I think banks shut down because they don't have enough money to repay other banks when they borrow money from them and also because they might not have enough money to pay their staff.In 2008 the workers bosses gave them extra money for earning lots of money for the bank.This encouraged the workers to take risks for even more money.They should have kept on doing the same thing because they were already earning lots of money.This could have been another reason why banks shut down.

  • I love your opinions and suggestions on this crisis and I will really take what you said on board it has really helped a lot understand what other people's opinions are on this thank you, again!