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by bee_rider 1187 days ago
Interesting. So is the coverage cap actually accomplishing much?
1 comments

It spreads risk throughout the system. In a maximally-resilient scenario, everyone would have a small deposit at every possible bank -- then when any bank fails, it's "no big deal", and you won't panic and withdraw your money from the rest. This is similar -- any particular failure is going to be for half (or less!) of your money, instead of all of it, reducing the urgency and spreading out the risk.
Ah, that’s interesting. So spreading the accounts across multiple banks is essentially accomplishing the goal of the program.