Would the execs get million dollar bonuses and fly jets? No, and I'm fine with that, I don't have to count on a financial crash once every decade or two.
What do you think would happen?
What? Insurance companies (in general) are some of the most capitalistic. They teams of actuaries calculating risk to leverage a large capital pool to generate more capital.
In the US you have low taxes but have to insure against everything. In the EU we have high taxes but insurance is not a thing unless mandatory (car/home). I don't even have the latter, stupid yes, but I would suck it up and not blame it on the FED.
It is possible to have a bank that just stores the money without touching it, but this bank would charge us for the costs of doing so, and it won’t be free, and it won’t be popular vs free options (which once every 10-20 years blow up).
Meanwhile they're closing offices to save money, and making billions every year. They can make it work, we just have to demand it.
The bank has to cover it, but not today. And it's an agreement and not a surprise when it happens.
No, lets create a complicated mess, fractional reserves, excess liquidity and having money costs money, growth and more growth and ... and .. and. You're all falling for it because you're greedy and don't want to be left behind.
When is anyone going to realize the actual problem? How many times does it have to happen? I'll see you guys again in 10-15 years as we have the exact same discussion.