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Alternatives to the Federal Deposit Insurance Corporation
Originally published in The Independent Review
Federal deposit insurance creates moral hazard that encourages risky banking practices and sets the stage for bank failures and financial crises. Alternatives to our current scheme include the creation of a more stable, privatized deposit insurance system, and the strengthening of market discipline through the lowering of mandated coverage levels, or doing away with deposit insurance requirements altogether.
Federal deposit insurance creates moral hazard that encourages risky banking practices and sets the stage for bank failures and financial crises. Alternatives to our current scheme include the creation of a more stable, privatized deposit insurance system, and the strengthening of market discipline through the lowering of mandated coverage levels, or doing away with deposit insurance requirements altogether.
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Find the article at the Independent Institute.
