The Empirical Relationship Between the Tier 1 Leverage Ratio and Community Bank Failures after the Global Financial Crisis

Akos Horvath
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Akos Horvath: https://www.federalreserve.gov/econres/akos-horvath.htm

No 2025-12-15, FEDS Notes from Board of Governors of the Federal Reserve System (U.S.)

Abstract: This note uses a logistic regression to model community bank failures in the period from 2008 to 2012 and estimates how the probability of bank failure depends on the tier 1 leverage ratio. Over this five-year period, about 5.4% of the 7,184 U.S. community banks failed.

Date: 2025-12-15
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedgfn:2025-12-15

DOI: 10.17016/2380-7172.3929

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