UK Politics
General Discussion for politics in the UK.
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Putting your money in a bank is just a conditional IOU from the bank to you. In other words, it's no longer your money and they don't have to give it back to you if they don't want to. Monero solves this.
False, and I'll assume you are American.
In the UK, you are protected up to £85k per bank.
https://www.fscs.org.uk/what-we-cover/
Government regulation can protect people. I know that concept seems crazy in USA.
We supposedly have $250k, but the FDIC has 1% of the money they say they cover. A very few big banks or many small banks fail and the FDIC is broke and the money would have to be printed by the fed and cause hyperinflation. I bet your regulator has only a small percent too.
Hyperinflation doesn't happen that quick.
Not all banks go pop at once. Usually when banks go bust in UK, the gov steps in, recovers them and sells after. Many banks are perceived as too big to fail.
I don't know a whole hell of a lot about the UK, so I will speak to the US. When the Federal Reserve raised interest rates, it has put tons of pressure on the commercial real estate office sector and has put serious pressure on most all of the regional banks. Your JP Morgan and your Wells Fargo are decently alright. But your local town banks are absolutely hurting. And enough of those very well could go bust to cause major issues. JP Morgan going down would be slicing an artery, but all these little banks going down would be death by a thousand cuts. You end up dying either way. It's just how quick does it happen?
Most of the smaller banks in the UK are gone. We don't have a lot of "town banks".
The risks to the US may be very different from here. Either that or you could be guilty of catastrophising.
From what I've heard, we have about 4,000 banks and so most of those are going to be smaller regional banks. We only have a few big ones that take up most of the news cycle.