Comparing the largest failures which took place from 1980 to 2008 in the financial business on one hand, and the non-financial business on the other hand, provides some interesting findings.

First, large failures occurred in waves. From 1988 to 2002, large bankruptcies hit mainly the financial world. From 2001 to 2006, it was the turn of the non-financial businesses. Alas, the period 2007-2008, claims the dubious privilege of witnessing very large failures in both the financial and the non-financial worlds.

Second, the financial world exhibits an awing performance in terms of total assets loss. The sum of the assets of the bankrupt financial companies included here reaches the exorbitant figure of 1,446 billion US$ (constant 2008=100). This is more than the 2008 GDP (gross domestic product) of South Korea (1,312 billion US$ PPP). It is also 2 times higher than the equivalent value for the non-financial businesses - 1,446 against 688 billion. This is indicative of the hegemonic weight – and the correlated risk - of the financial industry in today's developed world.

Third, large failures in the non-financial world are symptomatic of the shake ups that took place in the real economy. The energy (2001 to 2005), automotive (2001 to 2005), air carrier (2002 to 2005), retail distribution and the telecommunication businesses (2002) registered major company failures probably resulting from the competitive earthquakes that affected these industries.

Source: see BankruptcyData

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