Regulated fractional reserve banks are usually insured by the regulators. If the bank goes bust, the government covers the customers' losses up to a predetermi

Regulated fractional reserve banks are usually insured by the regulators. If the bank goes bust, the government covers the customers' losses up to a predetermined amount (FDIC covers $250k per account in the US). This helps to prevent bank runs, because people know that they'll get their money even if the bank collapses.