You are correct. What I was pointing out is that actual regulated banks are also prone to failures, especially in these trying times. Because they also hold a fractional reserve.

In developed countries, banks are rarely left to completely fail nowadays, the small ones are usually taken over by the big ones, and the big ones are bailed by governments/regulators.

Yes, I'm not sure the FDIC deposit insurance per se (and the attendant limits on what it covers) has actually been invoked in recent memory- the banks that failed in 2008 were just taken over by bigger banks, which were themselves handed cash to stay afloat.

It's not a problem, until it is. Mh, sounds familiar.

Rarely isn't never: https://www.fdic.gov/resources/resolutions/bank-failures/fai...

That list seems to include buyouts, though, i.e. cases in which the FDIC didn't actually have to directly disburse funds.

In Europe, there were two bank failures that I know of in the last few years that required tapping into the regional FDIC equivalents. In at least one of them, quite a few depositors actually lost money (due to having savings in excess of the insured maximum).

In quite a few buyout cases, the buyer only buys what's left after the FDIC pays out any losses. The FDIC prefers to do it this way since having an intact set of customers is valuable to the acquiring bank and helps defer the cost and especially administrative overhead of disbursing insured funds.

"Purchase and Assumption Transaction. This is the preferred and most common method, under which a healthy bank assumes the insured deposits of the failed bank. Insured depositors of the failed bank immediately become depositors of the assuming bank and have access to their insured funds. The assuming bank may also purchase loans and other assets of the failed bank."

https://www.fdic.gov/consumers/banking/facts/payment.html

We haven't seen any indication that a wave of bank failures is coming. We haven't seen any failed banks in a couple of years.

Now, that could change and we could see a recurrence of the wave of bank failures that started in 2008 and slowly tapered off, but you argument for that can't just be a hand wave at "trying times" and "fractional reserve" because the numbers currently show the opposite: https://www.fdic.gov/bank/historical/bank/

Still smart to keep total accounts per type per bank under the insurance limit (currently $250,0000), and to directly verify that your accounts are actually insured using the FDIC's tool: https://closedbanks.fdic.gov/aii/

Did any depositors loose money in 2008 from bank failures? If not when was the last time regular depositors lost money?

Right, even US depositors over the FDIC insurance limit didn't lose money in 2008 as far as I remember? The failing banks got taken over by bigger banks, which were bailed out as necessary.

I don't think that information is public to protect privacy...but any balances over the limit in a failed bank would result in non-insured losses.

That's actually not true [1] - the FDIC has continued the practice of covering balances over the insured limit despite not being required to.

[1] https://www.americanbanker.com/opinion/will-fdic-keep-protec...

Interesting, glad they're doing that but ok probably best not to count on that policy if you don't have to.

In 2008, no. "No depositor in an American bank lost a penny to a bank failure." [1]

But they were bailed-out by larger banks, and eventually the taxpayer. Next time, there might be bail-ins instead. [2]

[1] - https://www.investopedia.com/articles/economics/09/financial...

[2] - https://www.investopedia.com/articles/markets-economy/090716...