The recent banking turmoil in the US and Europe triggered by the failure of Silicon Valley Bank,

the largest bank failure since the 2008 financial crisis, seems to have calmed.

But questions remain about whether banking stress could we surge and what

policy makers can do to prevent that.

I'm Allison Nathan and this is exchanges at Goldman Sachs. On this special episode, we're breaking down our most recent top of mine report, now available

on GS.com.

We speak with former banking regulators and experts who have lived through

banking crises. Dan Tarulo, former Chairman of the Fed's Committee on Supervision and

Regulation, Tom Honegg, former President of the Federal Reserve Bank of Kansas City and Vice Chairman of the

FDIC, and Gary Gorton, Professor at Yale University, who's written extensively on Bank Panics.

We first asked about the nature of the crisis and

whether it differed at all from past crises. As our bank analysts have

described on a recent podcast, banks face deposit outflows last year as companies found it more difficult to raise

cash in an environment of sharply rising interest rates. To meet those

outflows Silicon Valley Bank sold long-term treasuries it held on its balance sheet at a loss

since the value of those securities had plummeted as interest rates rose.

A capital raised to cover those losses failed and a significant run on

deposits occurred causing the bank to fail. And indeed Tarrillo describes the

recent crisis as a textbook bank run. Here he is. In broad terms there was nothing unusual about this bank run.

That is the bank run proceeded exactly as textbook suggests bank runs proceed.

There's a question raised with some piece of information

provoking the question or the uncertainty on the part of some depositor,

...