Here we go again.

The federal government is bailing out the banking industry, and

the American people, who have seen this show far too often, have every right to be
furious.

The proper target for that anger, however, is not the bailout itself, but the need
for it.

The government’s decision to guarantee the full amount of insured and uninsured
deposits at Silicon Valley Bank and New York’s Signature Bank is the best choice
available to preserve the health of the broader economy. A new Federal Reserve
program that offers subsidized loans to banks is also a good idea under the
circumstances. President Biden’s pledge on Monday that “we’ll do whatever is
needed” was needed.

But the wide-ranging intervention is only necessary because the newly shuttered
banks — the second- and fourth-largest failed banks in American history — were not
exceptions to a pattern of general probity. Just as before the 2008 financial
crisis, banks have once again managed to ring up billions in profits by making
risky bets and then gone running for government aid as those bets have started to
sour. At the end of 2022, the U.S. banking industry was sitting on a total of about
$620 billion in unrealized losses as a result of investments undermined by the rise
of interest rates.

When the American public last swallowed the bitter pill of a bank bailout,
policymakers promised to regulate the industry more stringently to end the long-
running cycle of privatized profits and losses absorbed by the public.

Those changes, including the safeguards imposed by the 2010 Dodd-Frank Act, were,
largely, to the good. On average, an American bank failed every three days between
1980 and 1994. The pace of failures reached similar heights in the immediate
aftermath of the 2008 financial crisis, but since then failures have been much less
common. The failures in recent days ended the second-longest stretch without a bank
failure since the Great Depression.