Offshore bank failure is a situation in which an offshore bank defaults on its obligations to its depositors or creditors, either due to insolvency, regulatory misconduct or mismanagement. This can occur when the bank is no longer able to meet its financial obligations, is drawn into illicit behavior of its customers, or when it has engaged in fraud or other questionable activities. Additionally, it can occur when the bank’s host country has imposed sanctions or restrictions on the bank, leading to a loss of liquidity or other financial issues.