The reality is that there are savings in every community. And as I have long argued, many savings are literally wasted. Banks do not need deposits to lend.
Then how can a bank go bust when people withdraw their deposits in a bank run?
Think it through. Those Granite bonds at Northern Rock are still paying off, there’s been no great big loss on the loan book. Yet NR did most assuredly go bust. How, if banks don’t need deposits?