What if a major US regional bank failed and reignited a crisis?
A major regional-bank failure with deposit flight is a credit-and-confidence event: HY spreads widen, financials and high-beta crypto/Nasdaq sell first, and the contagion question (not the single bank) drives the tape. The direct analogue is the Mar-2023 SVB/First Republic run that gapped regional-bank equities and HY before the JPMorgan rescue. Forward angle: post-2023, the channels are CRE marks and uninsured-deposit velocity (deposits now move at app speed), so a run is faster than 2023 — watch deposit betas and the BTFP-style backstop response, not just one balance sheet.
Every number ships with its receipt — the odds, the range, the precedents, and a public grade at Reality Check. The statistical machinery that produces it is proprietary.
The butterfly cascade
How this trigger trickles across markets, left → right — the root shock, its first‑order moves, then the ripple effects. Drag any node; tap a market for its real price history.
Resolution timeline — how this probability is moving
Our model's odds (electric blue) over time vs the market's (Polymarket, amber), from the past toward the 6–18 months horizon. Each dot is a real macro event that nudged the probability — green pushed it up, red pushed it down. Tap a dot for the source. Loading the probability audit trail…
What it would mean
If this plays out, it is a risk-off shock. A major US regional-bank failure reignites a banking crisis and deposit flight. The trigger decomposes into signed root‑shocks — Credit spreads ▲ · Financial conditions ▲ · Risk appetite ▼ — which propagate through our causal graph to the markets below.