| Bank panic | The simultaneous failure of many banks during a financial crisis.
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| Bank run | An event when depositors lose confidence in a bank and make withdrawals, exhausting the bank's reserves.
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| Basel Accord | An agreement requiring internationally active banks to hold capital equal to or greater than 8 percent of their risk-adjusted assets.
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| Call Reports | The detailed financial reports banks are required to file every three months. Officially known as the Consolidated Reports of Conditions and Income.
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| CAMELS | The system used by U.S. bank examiners to summarize their evaluation of a bank's health. The acronym stands for Capital adequacy, Asset quality, Management, Earnings, Liquidity, and Sensitivity to risk.
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| Contagion | When the failure of one bank causes a run on other banks.
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| Deposit insurance | The government guarantee that depositors will receive the full value of their accounts should a financial institution fail.
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| Examination (of banks) | The formal process by which government specialists evaluate a bank's financial condition.
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| Forbearance | Political pressure on regulators to allow banks with insufficient capital to continue to operate.
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| Illiquidity | The inability to meet immediate payment obligations. For a bank, reserves are insufficient to honor current withdrawal requests.
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| Insolvency | When the value of a firm's or bank's assets is less than the value of its liabilities; negative net worth.
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| Lender of last resort | The ultimate source of credit to banks during a panic. A role for the central bank.
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| Payoff method | Where the Federal Deposit Insurance Corporation sells or pays off a failed bank's depositors and then sells the failed bank's assets in an attempt to recover the amount paid out.
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| Prompt corrective action | Regulators' closing of failing banks, mandated by bank regulations.
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| Purchase-and-assumption method | Where Federal Deposit Insurance Corporation finds a firm that is willing to take over a failed bank.
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| Regulation | A set of specific rules imposed by the government that the managers of financial institutions must follow.
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| Too-big-to-fail policy | The idea that some financial institutions are so large that government officials cannot allow them to fail because their failure will put the entire financial system at risk.
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