FDIC is federal insurance and it's for the individual entities that deposited the money. It's capped at $250k per account at the failing bank. It's meant to pro

FDIC is federal insurance and it's for the individual entities that deposited the money. It's capped at $250k per account at the failing bank. It's meant to protect the little guy and not the big guy that failed. It also encourages users to diversify their financial institutions if you are really packing money away in accounts that exceeds $250k. Otherwise no financial institution is actually insured against it's entire book. That would be insanely expensive and financially complicated at the scale banks operated at. For example, JP Morgan Chase has $3.7 TRILLION in liabilities on the books. Where the hell is an insurer going to get $3.7 trillion to gamble?