This paper summarizes our analysis of 171 national banks that failed be tween 1979 and 1987. We have found that poor policies, procedures and man agement quality lie at the root of those failures. This finding closely parallels conclusions about the causes of major industrial accidents in the past decade, namely, poorly conceived policies and procedures, failure to follow established policies and procedures, inadequate controls and faulty judgement. Because of the parallels between bank failures and industrial accidents, an understanding of the root causes of bank failures may provide new insights for the identifica tion and management of technological risks and environmental hazards.
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