The 2008-'09 banking crisis was caused by banks not adapting to industry changes, leading to increased competition and risky practices. Many banks failed due to poor risk management and reliance on complex securities backed by underperforming mortgages. The collapse drained the FDIC Deposit Insurance Fund, leading to prepayments by insured banks. By the end of 2009, 702 banks were on the FDIC's 'problem list'.