Is Banking Crisis As Bad as 2008 Collapse? Janet Yellen Weighs In

• Treasury Secretary Janet Yellen believes that the current financial turmoil is not as dismal as the 2008 financial crisis.
• Steve Eisman also believes that it is confined to a bunch of regional banks that have made some bad bets.
• The U.S. government is taking action to protect depositors and Yellen is also prepared to enact additional safeguards if needed.

Recent chaos on Wall Street has sparked fears among many Americans that the U.S. banking system could see a repeat of the 2008 financial crisis.

Multiple comparisons have been made between the fallout of this month's Silicon Valley Bank (SVB) collapse and Lehman Brother's bankruptcy 15 years ago. Neither SVB nor Lehman were among the nation's largest financial institutions, and both failures led stocks of smaller, regional banks—domestic and foreign—to tumble.

But Treasury Secretary Janet Yellen believes that, "This is different from 2008."

Speaking at a banking conference on Tuesday, Yellen said, "2008 was a solvency crisis. Rather what we're seeing are contagious bank runs."

Instead of bad loans being the root of the problem, as seen in 2008, the recent turmoil has been driven by mass withdrawals prompted by the Federal Reserve's rapid tightening.

"We do not see that situation in the banking system today," she added. "Our financial system is also significantly stronger than it was 15 years ago."

Yellen's remarks, which sought to restore confidence in the banking system, come less than two weeks after SVB, Signature Bank and Silvergate Capital all closed down in rapid succession. Then over in Europe, UBS rescued Credit Suisse, buying the once-Swiss behemoth for nothing.

In response to the SVB news, Yellen's Treasury Department and the Fed moved quickly to intervene and protect depositors from losing their money. On Tuesday, Yellen said she was prepared to enact additional safeguards to contain the fallout.

"The situation is stabilizing and the U.S. banking system remains sound," she said, adding that "Similar actions could be warranted if smaller institutions suffer deposits runs that pose the risk of contagion."

The threat may not loom as large this time around, but there is reason that many are fearful of seeing the past repeat itself. The collapse of SVB is the second-largest bank failure in U.S. history and bank runs at one institutions can have rippling impacts across the sector.

However, Yellen isn't the only one who appears hopeful that the current financial turmoil, although still dangerous, is not as dismal as 2008. Her outlook echoes that of Steve Eisman, the investor portrayed in "The Big Short" for his financial crisis predictions.

On Monday, Eisman told CNBC that the current situation is "not even close to the same magnitude" as the crisis seen in 2008.

"Back then, you were dealing with the largest banks in the country and, had they failed, the economy would have crashed," Eisman said. "This is a situation that is really confined to a bunch of regional banks who have very concentrated deposit relationships that are mostly above the $250,000 limit, and they made some very bad bets."

"Put this way—when JPMorgan goes down, Planet Earth burns. When First Republic, if it were to go down, it's a problem, but it's a handle-able problem," he added.