goes to plan the bank gets that money back plus interest these loans have to be backed up by sufficient capital this could comprise deposits such as personal savings accounts or bonds but technically neither belong to the bank after all customers can withdraw their cash anytime they want and when bonds depreciate in value banks write that off. the bank's own capital on the other hand includes things like profits it's previously made so what happens during a financial crisis if companies don't pay back their loans the bank loses capital it eats the loss. if the bank has enough capital reserves to remain stable by the way before the financial crisis the reserve ratio of european banks was only about one point five percent the european central bank's new rules would