What happens when a bank goes under and how does it impact its customers and the financial system?

When a bank goes under, it means that it is unable to meet its financial obligations and is declared insolvent. This can impact its customers by potentially causing them to lose their deposits if the bank is unable to repay them. It can also have wider implications for the financial system, as it can lead to a loss of confidence in the banking sector and potentially trigger a domino effect of other banks facing financial difficulties. This can disrupt the flow of credit and money in the economy, leading to economic instability.