Deposit insurance is fine as long as it isn’t contorted to bail out the higher-leverage and higher-risk investment-banking style activities of the largest banks post-GS. That’s the problem and a $100B cap is too crude a solution.
Agreed. Deposit insurance, for all of its benefits to savers, puts the taxpayer at risk for all manner of imprudent banking practices. I do favor a gradual phaseout of deposit insurance so that depositors start paying more attention to the prudence and solvency of their banks.