One of the most feared events in banking is the cry of systemic risk. It matches the fear of a cry of “fire!” in a crowded theater or other gatherings. But unlike fire, the term systemic risk is not clearly defined. Moreover, unlike firefighters, who rarely are accused of sparking or spreading rather than extinguishing fires, bank regulators at times have been accused of contributing to, albeit unintentionally, rather than retarding systemic risk. In this article, we discuss the alternative definitions and sources of systemic risk, review briefly the historical evidence of systemic risk in banking, describe how participants in financial markets traditionally have protected themselves from systemic risk, evaluate the regulations that bank regulators have adopted to reduce both the probability of systemic risk and the damage it causes when it does occur, and make recommendations for efficiently curtailing systemic risk in banking.