STORY: "I definitely do not think the Fed should be bailing out investors in the banks," Ledoux said, explaining that investors "should know the risks that they're taking."

"If we don't have downside for investors in any kind of investment, then you're gonna see runaway asset prices... and thus more volatility...."

U.S. regulators took over Silicon Valley Bank and Signature Bank this month amid a flight of depositors.

Soon after, U.S. President Joe Biden, in a White House speech, made it clear that “investors in the banks will not be protected,” adding that "they knowingly took a risk and when the risk didn’t pay off, the investors lose their money. That’s how capitalism works.”

First Republic Bank, another U.S. regional bank struggling to remain viable following a flight of deposits, is currently looking at ways it can downsize if its attempts to raise new capital fail.