> Now this is how a bank can offer a savings account but also underwrite mortgage, business and auto loans using the savers capital. Thru numerous failures the

> Now this is how a bank can offer a savings account but also underwrite mortgage, business and auto loans using the savers capital. Thru numerous failures the traditional financial system has been regulated to a point where banks usually don't blow up too badly (they totally still do though.) Specifically through laws that say entities that hold customers money in certain ways can't arbitrarily then use that money to speculate on risky investments. Namely because they can cause huge losses (especially via bubbles that burst) leaving the customers SOL.