The second-largest bank failure in U.S. history occurred on Monday, when the Federal Deposit Insurance Corporation seized First Republic Bank, a San Francisco-based bank that had been teetering for weeks amid worries about its profitability, and sold it to JPMorgan Chase, the country’s largest bank. First Republic’s shareholders will be wiped out, and JPMorgan will pay the government insurance fund $10.6 billion. As part of the deal, the F.D.I.C. agreed to provide JPMorgan with fifty billion dollars in long-term loans and take on eighty per cent of any losses that JPMorgan suffers in the next five years on loans that First Republic made to companies, and the same for the next seven years for residential mortgages.

This is the third big bank failure in two months—the others were Silicon Valley Bank (S.V.B.) and Signature Bank—and it confirms two old truths. Banks, by their nature, are fragile institutions, potentially subject to runs by depositors that can poleaxe them in short order. The second truth is that whenever a big bank looks like it’s about to fail, the federal government usually steps in with guarantees or taxpayers’ money because of fears that an uncontrolled collapse could prompt panic and lead to an economy-wide financial crisis.