BUT it's also a form of "insurance". If there's a suspect a bank won't be able to honor deposits, bank run ensues, THEN the given bank can't honor deposits obviously, because no bank works like that today, that is: self fulfilling prophecy
If you don't trust the bank, don't put your money there. Otherwise, put your money at the Bank of the United States, backed by and owned by the full faith of the US taxpayer.
I will not bail out private money making banks via the FDIC via my tax dollar.
If you put money into a private bank, then when it fails, you should lose that money.
I will not bail out private money making banks via the FDIC via my tax dollar.
Never in American history has the FDIC had to take a "tax dollar" during a bank failure. The government does back it, yes--but the amount of private money in the FDIC makes it extremely unlikely that bank failures even at the scope we were looking at in 2008 will tap them out.
BUT it's also a form of "insurance". If there's a suspect a bank won't be able to honor deposits, bank run ensues, THEN the given bank can't honor deposits obviously, because no bank works like that today, that is: self fulfilling prophecy
It's a necessary evil (for the customer's sake)