Bankers should be able to pursue risky strategies. Their customers should share in the risks, rather than disadvantaging more conservative banks by socializing losses (not with funds from "taxpayers," we are assured, but from anyone who happens to have a bank account).
I think there’s very little chance that a sophisticated depositor let alone an average depositor can accurately judge a bank’s risk profile. However when someone is paying a point higher than everyone else, it maybe makes sense to ask some tough questions.
Right, “There’s no such thing as a free lunch” gets you most of the way there. Depositors can’t easily judge how well regulators regulate either.
Supposedly the lesson of 2007-09 was that risk is everywhere and low risk events are correlated. I guess the lesson of 2020-22 was that when in doubt, print money. I would love to see a federal judge step in here and block FDIC's move on the grounds that only Congress can appropriate funds. I fucking hate Trump and DeSantis, but Sleepy Joe is inching ever closer to losing my vote. Maybe I'll write you in.