We need to put the fire out,” says Guren. Some politicians warned against a taxpayer bailout of banks that may have acted rashly, and Adam Guren, associate professor of economics at Boston University’s College of Arts & Sciences, says once the crisis is dealt with, analyzing what happened and why will be critical. But government regulators promised that depositors at both failed banks would be covered for their losses, overriding federal deposit insurance’s normal cap of covering deposits only up to $250,000. The double whammy spooked observers about a possible contagion spreading to other banks and causing a financial crisis. Then on Sunday, New York’s Signature Bank also closed after a run touched off in part by panic over Silicon Valley’s shuttering. SVB collapsed after many of its start-up depositors made a run on the bank amid a venture capital crunch in the tech sector.

“Americans can rest assured that our banking system is safe, your deposits are safe,” Biden said. Reacting to the collapse of Silicon Valley Bank late last week, the second-largest bank failure in US history, President Biden on Monday vowed to do “whatever is needed” to forestall more runs.

What happens if a bank goes bust