What does a 'Bank Failure' Mean?

Question

My local news channel was talking about how some people are concerned that Bank Failures will become more wide spread. what is a bank failure and how will it effect people?

Answer 1

A bank fails when it has loaned people money and they do not pay it back.  When they have more debt than cash.  When a bank fails anyone who has money in that bank is insured up to $100,000.  If your bank failed tomorrow and you had $3,000 in an account you would not have to do anything. The Federal Government will take over the bank and the assests of the bank will be sold to another bank.  

Just on the slim chance you have more than $100,000 you should not have more than $100,000 at any one bank.