[Linosaurus]

You seem to be saying, that bank owners can take big risks and make enough money that it’s worth it to occasionally lose all equity. But if we make sure depositors also lose money from this, you think depositors will be more careful - they’ll demand higher interest or choose banks with a lower risk profile?

I don’t think that is practical at all. Not enough of people are going to be doing their due diligence on bank risk profiles, 20 years later.

Making excessive risk illegal through regulations seems more practical, but maybe your point was also that these failed.

[machina_ex_deus]

Of course, when you're forced to pick a bank, and you're forced to stay in that bank because it's a nightmare to move banks, and you're forced to pick the largest banks because only they are too big to fail, there is no point doing any due diligence.

If you banked directly at the Fed, or with crypto, then moving some of your money to a bank would actually be a choice. And the entire incentive structure would shift accordingly.

They have no incentive to change. They are given a government backed mandate to be your only choice. Given those privileges, it's their incentives to abuse them. They have been continuously abusing them for years. It's not only risk, it's the interest rates they give customers. They get to arbitrarily pick and choose their friends to get good interest rate while you get trash.

They get to do all of this because they are protected with innocent people as meat shields. Meat shields that have no other choice but to protect these people from consequences.