This would only apply stress in the case of widespread failure. One bad bank means only using $250k in insurance. On the flip side, why would you engage in a b

This would only apply stress in the case of widespread failure. One bad bank means only using $250k in insurance. On the flip side, why would you engage in a bank run when you’re fully insured? It seems it would slow the incentives to be part of a bank run, which is the systemically damaging part.