Exactly because the situation is reversed: the banks are much more likely to be strategic and self preserving than the general public, due to concentration of power and many other factors.

This. Good comment highlighting a super important insight: freshman Ec 10 thinking does not universally apply across all kinds of economic actors.

In trying to apprehend reality as closely as feasible, it will not do to make assumptions like "all actors have constant (or even he same lognormal function describing) marginal utility" or "ignoring transaction costs and taxes."

This is most crucial in understanding behavior in vastly asymmetric situations (e.g. A Croatian making $100 a month vs a bank). Of course, much of our consumer tech industry is founded on this sort of asymmetry, so the concept is not out of reach; yet, we of the technical mindset often are too quick to use the lens of a convenient simplifying abstraction when it comes to political questions of economic incentives...

I hear you, but isnt deposit interest an incentive for the depositor? Doesn't the interest partly reflect the risk the depositor takes? Theory aside, deciding between a bank with such precedent and one without and with equal interests, I don't think anyone would choose the 1st. This alone says something.