Lawrence White on banks runs, the FDIC and latest round of bank failures

If the uninsured depositors in Bank A can't access their funds, that's going to make the depositors in Bank B nervous, we have contagion and then we're back to 1933.

I think on the one hand, FDR [Franklin Delano Roosevelt] would be wincing and saying, "ah, man, I thought we wouldn't have screwups like this."  On the other hand, I think he would smile and say, "ah, it didn't spread, we haven't had contagion.  We haven't had widespread runs.  That was my goal in creating the FDIC."

~ Lawrence White, NYU Stern economics professor, "Everyone Wants Interest on Their Deposits. That's Bad for Main Street Banks.," The Wall Street Journal, July 6, 2023