Whoa, hold up there. The risks to bank stability, and customer deposit integrity, are a
little higher than most people may realize.
Back in the 2007-2010 financial crisis, IndyMac Bank went under. They were a major bank on the west coast, especially the Los Angeles metro area.
And when they did, there were thousands of depositors who were over the FDIC limits for their accounts, which at the time were only $100,000 per account, not yet raised to $250,000 per account. Some were individuals, some were businesses, some were trust accounts, some were only supposed to be temporarily over the limit because they held money from a deceased person that was a life insurance payout or going through probate, and so on.
But what was really unusual in their case was that the FDIC could not find any other bank that would take over IndyMac Bank directly, and assume its debts and deposits.
So the FDIC had to create a brand new bank out of whole cloth, called IndyMac Federal Bank (note the name), to take over IndyMac Bank, before it could be dealt with further. Eventually it got acquired by One West.
Just this one bank's failure cost the FDIC eleven billion dollars. And the FDIC as an agency barely managed to stay afloat during the 2007-2010 financial crisis, because it had so many banks where it had to either manage shotgun weddings with other more-stable banks, or bail them out entirely. Of course, the FDIC had an implicit backstop from Congress, but they came damn near bumping up against their full budget during this time period.
And again, that eleven billion for that one bank was not counting all the people who were over their deposit limits -- $270 million over the limits, in total. Those people were screwed.
https://www.latimes.com/archives/blogs/money-company/story/2...