Similar teams at other banks have found real estate problems that were far more serious than bankers recognized, and caused banks to announce large losses.

In addition, the value of the peso had become increasingly volatile over the last two years, causing banks and securities companies to hedge their positions.

Depositors withdrew money from banks, which caused banks to fail.

The 1929 collapse of stock prices was followed by falling commodity prices which caused banks to fail.

All these developments have caused banks to place a premium on controlling expenses.

This, in turn, caused commercial banks to cut their prime lending rates by the same amount, to 9 percent.

But exploration, always risky, dropped sharply after Venezuela imposed foreign-exchange controls last year, causing foreign banks to cut off loans.

The same expectation caused banks to overexpose their capital in foreign loans.

But large banks are expanding their market share, using many of the same advantages that caused small banks to fight nationwide branching.

This caused numerous banks to collapse, as at this point there was no federal insurance to support the money in the banks.