Removing FDIC and letting banks fail would mean that individuals would only deposit money when banks had high equity %. i.e. the bank owners/shareholders inves

Removing FDIC and letting banks fail would mean that individuals would only deposit money when banks had high equity %. i.e. the bank owners/shareholders invest 30 cents of their own money for every 70 cents of the customers that is loaned out. That way if loans start to fail the customer is protected by the owners share.