March 2023 was a tumultuous month in the world of finance. On 8 March, Silicon Valley Bank, the 16th largest bank in the USA with US$209 billion in assets at the end of 2022, reported that it would incur a US$1.8 billion loss after it sold some of its assets to meet deposit withdrawals. Just two days later, on 10 March, banking regulators seized control of the bank, marking its effective collapse. It turned out that Silicon Valley Bank, or SVB, had faced US$42 billion in deposit withdrawals, representing nearly a quarter of its deposit base at the end of 2022, in just one day on 9 March. SVB had failed because of a classic bank run. At a simplified level, banking involves taking in deposits and distributing the capital as loans to borrowers. A bank’s assets (what it owns) are the loans it has doled out, and its...