Federal deposit insurance creates moral hazard that encourages risky banking practices and sets the stage for bank failures and financial crises. Alternatives to our current scheme include the creation of a more stable, privatized deposit insurance system, and the strengthening of market discipline through the lowering of mandated coverage levels, or doing away with deposit insurance requirements altogether.

Banking and FinanceEconomic History and DevelopmentEconomic PolicyEconomyFiscal Policy/Debt
Other Independent Review articles by Thomas L. Hogan
Winter 2023/24 How Monetary Policy Got behind the Curve—and How to Get Back
Winter 2022/23 Moral Hazard: A Financial, Legal, and Economic Perspective
Winter 2019/20 Financial Exclusion: How Competition Can Fix a Broken System