[crazygringo]

It's just insurance for your own account though. You pay to insure your car and you pay to insure your bank account.

As long as bank regulations are reasonably strict that this happens as infrequently as it does, ultimately having depositors foot the bill doesn't seem problematic.

It's more appropriate than taxpayers generally, and it can't be the bank owners because the whole point is they've already been wiped out.

[checkcircuits]

The problem is they aren't wiped out enough. Bankers who instigated the GFC got jobs elsewhere. One of them was even the CEO of SVB!

Breach of fiduciary duty in any other context is essentially a death sentence for a career in finance. Clearly being wiped out isn't enough. The complexity in the matter is that depositors reasonably expect to be able to get all of their money out at any time. As they should. It's their money. At the command of the fed their reserve rates were dropped to zero essentially making the cash value of an account a meaningless number in a computer.

Given this risk, the bank should be the sole party responsible for paying such insurance for it's depositors. It's a cost of doing business, and importantly taking a risk and fiduciary responsibility over a client. We demand doctors insure themselves because they can destroy a patients life. A bank should be the same. To have the depositor (or patient) front the cash in any form should be made illegal. Hence my demand to insure the funds are secured only through the bank owners themselves. Ideally, the executive board carries enough insurance to make all depositors whole in the event of a bank collapse. This should be uncontroversial.

[crazygringo]

> The problem is they aren't wiped out enough.

Corporations (and banks) rest on the bedrock principle of limited liability. To go beyond that is a pretty radical suggestion. That means if grandma buys shares in a bank as part of her retirement portfolio, then the worst case isn't that the shares go to $0, but that she owes money, without any limit she can know beforehand. I don't think that's a good idea.

> Hence my demand to insure the funds are secured only through the bank owners themselves.

I'm not sure there are any insurance companies who will insure an entire bank, and certainly not one of any decent size. That's the entire reason it's pooled insurance provided by the government.

And in any case, if it became that much more expensive to start a bank because you had to pay for all this insurance up-front, banking just becomes that much more expensive for consumers because owners still want to make the same amount of money in the end. At the end of the day, it's still going to cost consumers the same.