Bank failures seem unconnected to complex derivatives:

08/21/2009 | NYTimes.com

As more U.S. banks are shut down by the Federal Deposit Insurance Corp., it is becoming clear that most bank failures have nothing to do with investments in complex financial products that bear risks that are difficult for laymen to understand. Today, banks fail the old-fashioned way: They make loans but do not ever get the money back. These loans are going bad at a rate far beyond what banks and regulators imagined.

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