The best way for a government to stop the failure of one bank from turning into a bank panic is to:

Question

Quizplus · Accepted Answer

By ensuring that solvent institutions have enough liquidity to meet the demands of panicked depositors, the government can prevent a bank panic from occurring. This maintains confidence in the banking system and prevents a ripple effect of bank failures. Declaring a bank holiday or limiting withdrawals may also temporarily halt the panic, but does not address the root cause of the issue. Providing zero-interest rate loans to all banks regardless of net worth could also be a possible solution, but may not be the most effective or efficient approach.

The Best Way for a Government to Stop the Failure