Could a bank collapse happen again?

Yes — a bank collapse can happen again. Modern rules make it less likely and usually less damaging, but they do not make banks failure-proof.

Why it can still happen:

• Bank runs: If lots of customers withdraw money at once, a bank may run out of cash.
• Interest-rate losses: When rates rise, the value of a bank’s older bonds can drop.
• Loan losses: Recessions can push up defaults on mortgages, business loans, or commercial real estate.
• Contagion: Fear about one bank can spread to others.

What helps protect the system:

• Deposit insurance like FDIC coverage in the U.S. up to $250,000 per depositor, per bank, per ownership category
• Capital and liquidity rules that require banks to hold buffers
• Central bank support for temporary funding problems

To protect your money:

• Keep insured deposits within coverage limits
• Spread large balances across banks if needed
• Diversify into safer cash-like assets such as Treasury bills