[kirbyfan64sos]

This falls apart a bit when you consider that several larger banks did try to prop up First Republic for a bit, specifically because:

> the FDIC is funded by banks and receives no appropriations from Congress

So banks going down can certainly cause other banks money, too.

That being said, the "significant discount" is usually because, when you acquire the assets, you also acquire the bank's liabilities, and AIUI roughly speaking you're paying the difference between what you gain and what you lose in the process. More specifically, the FDIC helped fund JP Morgan's acquisition of First Republic because, if JP Morgan simply acquired the assets & liabilities directly, they would not be enough liquidity for it to be safe.

I.e. acquiring a smaller bank has some advantages but also some downsides, and it also destroys trust in the system which hurts the big banks too...so it's not really something that's exclusively beneficial and definitely not worth trying to trigger intentionally.