Elon Musk sees 'serious risk' of another Great Depression if the Fed doesn't stem the collapse of regional banks after SVB failure

• Elon Musk sees danger ahead for the US economy if the Fed doesn't contain the regional banking crisis.
• Financial blog Zero Hedge said on Twitter that unchecked pain among smaller banks could lead to a great depression.

Elon Musk wants the Federal Reserve get a grip on the US regional banking crisis, or else the world's largest economy could undergo its worst shock in decades.

Financial blog Zero Hedge on Saturday wrote on Twitter about the crucial role played by small- to medium-sized banks in the US financial system – a hot topic after this month's abrupt collapse of Silicon Valley Bank, a lender to tech startups and the first to be taken over by regulators since the financial crisis in 2008.

Small- and mid-sized banks account for 50% of commercial and industrial lending and 60% of residential real estate lending, among other loans, Zero Hedge noted with accompanying charts.

"If the Fed does not contain the regional bank collapse, there will be another great depression," it wrote, referring to the economic crisis that ran from 1929 through 1939.

"This is a serious risk," Musk responded to Zero Hedge.

In 1933, at the height of the Great Depression, roughly 25% of the 12.8 million people that made up the US labor force were out of work, according to the Labor Department.

This wasn't the first time Musk has chimed in on his own social media platform about SVB's collapse. Last week, he compared the bank's failure to the 1920s Wall Street crash, which preceded the Great Depression.

"Lot of current year similarities to 1929," the Tesla CEO said in response to a thread by Ark Invest CIO Cathie Wood.

Silicon Valley Bank failed this month after customers rushed to pull deposits in the wake of the bank's$1.8 billion loss on a sale of a bond portfolio. The portfolio's value was severely hit by rising interest rates enacted by the Federal Reserve as it tries to pull inflation to its 2% target.

First Republic Bank has emerged as a high-profile hot spot in the unfolding regional banking crisis. The stock crashed again on Monday following another S&P Global downgrade of its credit rating further into junk status.

The Wall Street Journal also reported that JPMorgan CEO Jamie Dimon was leading talks among big banks to provide even more aid to stabilize First Republic. Last week, a $30 billion rescue plan was created for the San Francisco-based lender by rival banks.

Fitch Ratings last week said a risk for First Republic was its "concentrated" focus on wealthy customers in urban coastal markets. Fitch had also downgraded First Republic's credit rating to so-called junk status.