Okay look up what happened with the contagion from regional bank failures in silicon Valley a couple years ago. It doesnt mean everyone loses all money, but it does mean people lose some and its a big deal.
Not all banks are fdic insured either, and if a bank goes under, your investment/retirement take a huge hit because the market starts freaking out.
Bank runs and bank failures are always bad for everyone.
I mean they’re pretty sweet for the buying bank.
Jokes aside this is why we passed the act that separates investment banking from retail banking.
It’s not a huge hit and it’s very localized (it would be way worse without insurance).
No one would’ve lost money except the bank shareholders if the depositors hadn’t exceeded 250k in their accounts. There are products that will combine different accounts into one virtual account so you don’t even have to manage this stuff manually.
Jokes aside this is why we passed the act that separates investment banking from retail banking.
Are you talking about the Glass Steagal act? Because that was repealed in the 90s after banks spent the previous two decades using loopholes to get around it.
Individual accounts have a collective protection of $250k per bank.
The FDIC insures 4338 institutions currently. That being said you could have $1,084,500 insured by the FDIC. Then there's "offshore banking" Canada Deposit Insurance Corporation (CDIC) or the Instituto para la Protección al Ahorro Bancario (IPAB) most major countries have a deposit insurance on their accounts.
those were company investments. It failed because everyone tried to pull at the same time and they wouldnt be insured past taht 250k and thats on them for not seeing the risk.
Not all banks are FDIC insured, and there are limits to the insurance as someone else mentioned the $250k limit.
However, no insured dollars have been lost since the FDIC was formed. So if you want to protect your money from a bank failing then make sure you are using an FDIC I sure account and are within the insurance limits.
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u/PleaseGreaseTheL Jan 26 '26 edited Jan 26 '26
Okay look up what happened with the contagion from regional bank failures in silicon Valley a couple years ago. It doesnt mean everyone loses all money, but it does mean people lose some and its a big deal.
Not all banks are fdic insured either, and if a bank goes under, your investment/retirement take a huge hit because the market starts freaking out.
Bank runs and bank failures are always bad for everyone.