“As long as government-insured banks, S&L’s, and credit unions exist, the banking industry should withstand the storm.”
well sure...as long as they exist.
Isn’t that what this is all about?
Their existence is being threatened isn’t it?
It is possible that the government insurance agencies may have to receive some taxpayer funding to meet all their obligations, but the existence of the insurance should provide adequate public assurance to discourage bank runs.
Some banks are solvent; some aren't. A situation where 10% of banks are found to be insolvent and the others solvent would be better than a situation where only 5% of the banks are believed to be insolvent, but nobody knows which 5%.