But regulators haven't really bailed out depositors. Firstly, the vast majority of the assets have just gone with the sale of FRB, along with that there is some

But regulators haven't really bailed out depositors. Firstly, the vast majority of the assets have just gone with the sale of FRB, along with that there is some cost, but the costs associated with this sale are estimated to only be around $13Bn and that's going to come out of FDIC - so it's funded by the banks anyway. The reason this is possible is because FRB only holds a very tightly regulated set of securities, so at worst there would only be a small shortfall and that's what the FDIC is there for anyway. You say that the regulations are harming the system, but crypto gives us a perfect illustration of what happens without these regulations. You don't end up with companies that function better, you don't avoid duration mismatch, your exchanges go tits up and it turns out that the CEO was spending all the cash on his bahamian polycule. And you say FTX goes bust and that's it but that really only works because bitcoin is so tiny that when FTX goes bust it isn't all of our pensions and life savings on the line. And it wasn't just FTX, FTX was the last domino in a whole slew of failures over last summer - half of which it turns out were self-dealing and committing fraud. The whole point is that the government can step in and backstop a system where it's tightly regulated what these banks are doing, they can't step in and backstop a system where your bank may literally just be taking your deposits and spending it all on bahamian parties. There's just this massive disconnect between the unregulated world where a bank can be bust and pay back 99 cents on the dollar, and the deregulated world where a crypto exchange can be bust and it turns out it's only going to pay 10cents on the dollar, and it won't even do that because the CEO started siphoning off the remaining funds.