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When we discussed deposits as a financial product I handwaved away explanation of an important bit of financial technology which makes them work, deposit insurance schemes. Along with the broader constellation of bank regulation, they form the public part of the public/private partnership that makes deposits money-good and therefore undergirds every transaction in the banking system and most of the wider economy.
The covered peril
Anatomy of a bank failure
Keeping your bank hydrated
Back to deposit insurance
Orderly bank failures
The cost of insurance
The ultimate backstop(s)
Deposit insurance as ubiquitous infrastructure underlying everything
Deposit insurance is the backstop that guarantees the money-ness of deposits. Here's how it works under the covers.
We are not affiliated with Patrick McKenzie. This unofficial audio edition is available to listen to and share for free. Read the original on Bits about Money.
Duration
~22 minutes (21K characters)
Release date
Jul 15, 2022