Bank failures have a significant impact on the economy. It leads to decreased lending, limited access to loans, reduced employment, slower product development, and hindered economic growth. Furthermore, it lowers investments, weakens financial markets, diminishes consumer demand, and adversely affects industries, ultimately impacting economic growth. Bank failures also erode consumer confidence, resulting in risk-averse financial behaviour, reduced spending, and a preference for storing cash. This contributes to demand-deficient unemployment, as firms struggle to afford additional employees and face decreased production due to low demand.