@MadMadMadMadRN @ddayen You have to pick one. Either you are serious about the reasoning behind limited deposit insurance (rich people and all but the smallest businesses must look after themselves, we want market discipline of bank soundness), and insure account holders only up to the limit, across all institutions. If you do this, you have not cured bank runs however. You can’t both have market discipline and no reason to run. Or, alternatively…

@MadMadMadMadRN @ddayen you give up on market discipline as a source of bank soundness, and acknowledge that market discipline is in fact bad at that, causing unsoundness in the sound as often as it ensures soundness in banks that might become unsound. So you just insure all deposits, and rely solely on regulation for banks soundness. Then…

@MadMadMadMadRN @ddayen ideally, perhaps eventually, you realize the structure of status quo banking is not regulable, bankers will always find ways to increase lucrative risk-taking despite your regulation, and you change the structure of banking to disentangle the deposits and payments system from at-risk lending and investing. We are working our way there, one crisis at a time.