> And to the extent they don't have anything at stake, it's because they get bailed out, which is a different concern altogether. The two things are directly l

> And to the extent they don't have anything at stake, it's because they get bailed out, which is a different concern altogether. The two things are directly linked. If people want to gamble on a bank deposit like any other investment, that's fine. The less sound banks will need to offer higher returns on money than the more sound banks in order to compete. The problem lies when the government (implicitly or explicitly) backs the deposits - without this backing, people wouldn't care nearly as much about the issue.