What is it that makes a bank weak, and prone to go under? Please be specific because I am trying to understand this.
They don't have the required amount of capital (free cash).
They have made bad loans and the losses from those loans have taken up their free cash (capital).
The regulators watch the capital levels of a bank, and when it drops to low, they warn the banks, if the banks can not raise new capital, the regulators (forcefully) merge the weak bank with a stronger one.
Simply put...
1. Interest rates are at all time lows so banks make squat for ivestment income.
2. Loans are harder to make because money is harder to get.
3. Most importantly people and businesses are defaulting on their loans.