metreon

There is a pragmatic issue though. Because the FDIC insurance limitation has not changed with inflation over several decades, many people at IndyMac were caught with more than $100,000 in their accounts. It is virtually a requirement now to have at least $500,000 just to retire with a modest lifestyle. Many older people easily have more than the current FDIC guaranty in savings.

Technically speaking, the people who lost life earnings as a result of the bank collapse can only blame themselves for not distributing their money in several accounts. But is it reasonable to expect people to know to do that, especially when no one has heard of such a bank collapse in recent memory? Moreover, how efficient is it to have a spam of account statements every month because you need five or more accounts to stay safe?

Some brokerage accounts are covered by a SPIC guaranty of $500,000, but I doubt many people know which, and many more are strangers to anything other than bank CDs and think of brokerage accounts as risky places to park their money.

Many of the people making a the run on the bank were not worried about the portion of their money insured by the FDIC, it was the uninsured part they were agonizing about.