If I have a CD, that CD is often not time locked, it just has a penalty for early withdrawal (X months of interest or whatever). If I don't trust that the bank

If I have a CD, that CD is often not time locked, it just has a penalty for early withdrawal (X months of interest or whatever). If I don't trust that the bank can give me the money, it doesn't matter if it's in a CD or checking account, I'm going to pull it out (screw the gains) and the liquidity problem still exists. The extra months/year of interest don't stop a bank run. This is why I think this can really only be solved by government and regulation. Government regulation on the quality of investments to make sure that they're really worth X% long term. If there is a bank run, government needs to step in with the government liquidity, and say "customer gets their money, we get your assets". Of course, brokering an auction for these amongst other banks is the preferred approach. There should be a fairly free market around what leverage banks are willing to take on as long as the investments that back it are regulated and solid. If a company wants to expose their shareholders to risk by keeping high levels of leverage, that's their problem, but you can't punish depositors for the mistakes of the bank. Not saying we shouldn't have any regulations in this space, but as long as mistakes impact shareholders and not depositors or taxpayers, I think everyone is happy.