Off-Topic: Banks need regulation

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	Name:	MartiniMan -
	Subject:	Banks need regulation
	Date:	1/24/2010 3:47:35 PM

I understand why banks are regulated and I was responding to the comment that the banks need more regulation. I don't agree with that assertion. As for the FDIC insurance it indeed serves a valuable service for your average consumer but for many businesses it provides limited value as their accounts often exceed this amount. They rely on other mechanisms to protect their money being held by banks.

So the millions of businesses that have more than $100K in cash in the bank don't rely on FDIC insurance to make them comfortable with the banking system. And I still maintain that absent the FDIC the markets would force the banks to insure their deposits and yes, evil insurance companies would gladly step into the void. The difference would be they would enforce common-sense requirements on their insureds like they do with our business lines of insurance. If a bank doesn't behave they lose their insurance and most consumers will elect to deposit their money in banks that have insurance. Of course we will never know because the government won't ever give up that stranglehold.