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The government via FDIC.

• unmole 4y ago
  FDIC is insurance, it's not a backing asset. And it's limited to 250k USD.
  • ceejayoz 4y ago
    It’s substantially better than nothing.
  • marcinzm 4y ago
    And without it you get occasional massive runs on banks since they don't have actual full backing. Moreover the government will bail banks out if needed providing another but non-guaranteed layer of protection. Maybe a better way to say it would have been that banks are safer because they're backed by the government including FDIC, bailouts, regulations, oversight, etc.
    • unmole 4y ago
      > And without it you get occasional massive runs on banks FDIC doesn't prevent runs on banks. It only pays out after a bank is declared insolvent and there's nobody willing to buy the bank. Banks are regulated for good reasons which make them safer. But at the end of the day banks are in the business of transmuting unsafe long term debt into safe demand deposits.