No, I'm not missing the larger picture. I just choose to acknowledge that the people who chose this course of action have dedicated their lives to the financial sector, are highly educated, and have access to the brightest minds in the world.

Considering that we learn about bank runs and trust in the financial system in high school economics class, I highly doubt that these people don't know about them.

In all likelihood, they chose the option that with the information they had, appeared to have the highest chance of success.