The challenge is what to pay to the people who pulled out all their assets hours before the bank failed. If the people who pulled out all their assets fast enou

The challenge is what to pay to the people who pulled out all their assets hours before the bank failed. If the people who pulled out all their assets fast enough keep 100% and the people who didn't keep 50%, this is wildly unstable and we see constant bank runs, as was common in the early 20th century. If the people who pulled out all their assets fast enough keep 100% and the people who didn't keep 95%, and normal people are banking, this is slightly unstable but most people aren't going to bring down the financial system to slightly reduce their risk of losing 5%. The system has been working like this for 70 years. The current batch of Silicon valley/new york financial types would stab an orphan in the face with their mother's fine silverware, to avoid losing 5%.