from the Richmond Fed
New Richmond Fed research on community and midsize banks evaluates the Federal Deposit Insurance Corporation Improvement Act (FDICIA) and Basel I by comparing failures in the 1986 – 92 period to those in 2007 – 13. Banks greatly increased commercial real estate lending between the two banking crises, but higher capital mitigated this risk. Failure rates in the recent crisis were mainly driven by the severity of the economic shocks.
However, higher capital did not help contain FDIC losses, which were much larger in the recent crisis. One possible explanation is limitations in the accounting triggers used by FDICIA’s prompt corrective action requirement.
In the late 1980s and early 1990s, nearly 1,000 banks failed, as did hundreds of thrifts. In response to this crisis, policymakers implemented a series of reforms designed to improve the safety and soundness of the banking system. Two of the most signifi cant were the increased capital requirements that came out of the 1988 Basel Accord and changes to the handling of troubled banks under the Federal Deposit Insurance Corporation Improvement Act (FDICIA) of 1991.
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Source; https://www.richmondfed.org/-/media/richmondfedorg/publications/research/economic_brief/2015/pdf/eb_15-06.pdf
