How about the banks insure their own deposits?
I buy fire insurance on my house, paid for out of my own revenue.
Banks can buy insurance, paid for out of their own revenue (the split between what they pay for deposits and what they collect on loans).
If the bank doesn’t loan speculatively, that insurance premium should be fairly minor.
Currently they do.
In the US, through the FDIC.
In Canada, through the CDIC.
There has NEVER been a deposit insurance program where the funds haven’t run out during a crisis. FSLIC went broke and the FDIC went negative during the S&L crisis; the FDIC ran out of money again during the housing bubble crisis; the credit union insurer had a large credit union that sat in conservatorship for 5 years because they didn’t have the money to resolve (liquidate) it.
yup.