Bank failures are common: even in a good year, several U.S. banks typically go under for one reason or another. And shadow banks sometimes fail, too. Banking crises—episodes in which a large part of the depository banking sector or the shadow banking sector fails or threatens to fail—are relatively rare by comparison. Yet they do happen, often with severe negative effects on the broader economy. What would cause so many of these institutions to get into trouble at the same time? Let’s take a look at the logic of banking crises, then review some of the historical experiences.