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A comment on DeFi risks and the decentralisation illusion. Parent comment

Re:DeFi risks and the decentralisation illusion by nickff on Tuesday December 21, 2021 @02:47PM (#29641288)
>"you should see what happened to a financial system in the bad old days, when there were banks but no deposit insurance, and there would sometimes be a run on the banks, and they lose all their customers' cash, and the shock waves ripple through the whole economy."

It is my understanding that there was never a run on a solvent bank; runs were the consequences of bank failures, not the causes of them. It should also be pointed out that most bank failures were clearly caused by so-called 'unit banking', where the government prohibited banks from having multiple branches in diverse areas. Less-regulated banks (such as those in Canada and Scotland) suffered fewer failures, and had no issues with runs.

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Re:DeFi risks and the decentralisation illusion by fennecfoxen on Tuesday December 21, 2021 @04:12PM (#29642151)
Historical bank runs were associated with a variety of causes; while some were caused mostly by bank failure due to asset shocks, others (e.g. the panics of 1893 and of 1933) were clearly marked by contagion, and even healthy banks were ruined by runs. https://eh.net/encyclopedia/banking-panics-in-the-us-1873-19...

(+ Postscript for original post: I typoed BIS as BLS because I'm used to the latter, oops)

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