Banks, depositors, taxpayers

Depositors are a subset of taxpayers. A depositor also pays tax. So what he gains as a depositor he may well be losing as a taxpayer

The YES Bank episode raises some questions that no one any longer asks. But these are important for the 21st century because they concern bank collapses, how to deal them, and who bears the cost.

This is important, at least in my view for what it’s worth, because the received wisdom of the last half century is that bank collapses must be avoided by getting the taxpayers to pay for saving them. This in turn has engendered the belief that banks are “safe as houses”.

But why does everyone think that banks are risk-free and that you can deposit as much you