Famed investor Michael Milken said Tuesday that the current banking crisis stemmed from a classic asset-liability mismatch that has played out miserably time and again in history.

“You shouldn’t have borrowed short and lent long… Finance 101,” Milken said on CNBC’s “Last Call.” “How many times, how many decades are we going to learn this lesson of borrowing overnight and lending long? Whether it was the 1970s, the 1980s and 90s.”

“Again here, the banks have enough credit, they had enough equity, they had enough ability to absorb credit losses that are coming. However, what they did is they doubled, tripled, quadrupled their size by borrowing overnight at artificially low rates, and buying intermediate securities,” said Milken in the rare comments on the financial markets by the junk bond innovator.

Earlier this week, First Republic became the third failure of an American bank since March and the biggest bank collapse since the 2008 financial crisis. The bank suffered a deposit flight as its long-term assets fell in market value after a series of rate hikes, triggering worries about unrealized losses on the balance sheet.

The founder of the Milken Institute believes that there will be a decrease in the percentage of loans that are owned by the banking system in the aftermath of the crisis.

“We will be stronger as they move into hands of… pension funds that have long term liabilities,” Milken said. “People are so focused on credit risk, etc., but one of the great risks is interest rate risk.”

In the wake of these bank failures, investors have punished other lenders that had similar characteristics. Companies with the highest percentage of uninsured deposits and potential severe bond losses on their balance sheet were most scrutinized.

To be sure, the 76-year-old investor acknowledged that the largest banks in the U.S. have in fact displayed conservative risk management amid the rapid increase in interest rates.

“It’s not like there isn’t a great deal of liquidity in this country….We should also take into consideration that our major banks… have exercised extreme caution on liability and asset management,” Milken said.

Milken was the king of junk bonds in the 1980s and pioneered leveraged buyouts. In 1990, he pleaded guilty to securities fraud and tax violations, and was later pardoned in 2020 by President Donald Trump.