[alxmng]

Blame properly rests on the system that is designed to produce bank runs. The system is designed such that bank runs are possible and inevitable. It is not risk management or the Fed’s interest rates, it is the practice of investing deposits while simultaneously promising those deposits are available. Instead of changing this system, the Fed was created to solve a problem the system inherently produces.

If deposit accounts were held at the Fed, and investment and loans were kept separate, there would be no possibility of bank run.