[oblio]

Banks tend to have savings from everybody. If they're dumb and they lose that money, a lot of people will lose their lives' savings.

There needs to be more and better control to avoid the "dumb banks" issue, but this problem seems to be a hard one. As in: we don't even have the basic science to solve this problem.

[chessturk]

The problem is private banks, state run banks can pull all sorts of crazy tricks. Look up how the Bank of France lends the country of France money, which makes them much more self sufficient than the US and its sale of bonds instead. No matter what anyone tells you, the fed is not a central bank. It is much less powerful and cannot protect the economy as well as a true one.

[candybar]

This is the exact opposite of how things are. Due to the constraints of the monetary union, the Bank of France is not a true central bank (the ECB is) and does not have the ability to print money or otherwise set monetary policy. It absolutely cannot indefinitely finance the deficit spending.

The Fed, on the other hand, is a classic central bank and it can print money to finance the federal deficit. I think you're misinterpreting the supposed "independence" of the fed - it remains a government institution that is largely independent operationally (https://en.wikipedia.org/wiki/Independent_agencies_of_the_Un...), but it's not a private institution. In other words, it's not independent the way a private bank is; it's independent the way FTC is.