How do banks work? Can banks fail? Why?

Banks accept deposits from customers and use those deposits to make loans and investments.

Banks also provide services such as checking and savings accounts, debit cards, and credit cards.

Banks earn money by collecting interest on loans and investments, charging fees for services, and by investing in financial markets.

Banks are regulated by the government to ensure that they operate safely and soundly, with adequate capital and reserves.

Banks are subject to risks such as credit risk, interest rate risk, and liquidity risk.

If a bank takes on too much risk or is unable to manage its risk, it can fail.

When a bank fails, the government may step in and guarantee deposits to protect the customers.

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