[rurban]

> These dangerous dynamics can be prevented through the government providing deposit insurance and acting as a lender of last resort to banks.

Not really. The https://en.wikipedia.org/wiki/Diamond%E2%80%93Dybvig_model argues that a better way of preventing bank runs is *deposit insurance* backed by the government or central bank. Such insurance pays depositors all or part of their losses in the case of a bank run. If depositors know that they will get their money back even in case of a bank run, they have no reason to participate in a bank run.

So, not necessarily the government. In practice it's always one of the central banks, either US or Europe. In the US it's the Federal Deposit Insurance Corporation.

[snake_doc]

The Federal Reserve and FDIC are both authorized by US government statutes. So it would be accurate to characterize them as government institutions.

The FDIC is backed by the full faith and credit of the United States government.

The Board of Governors of the Federal Reserve is an agency of the federal government and accountable to Congress.