Nor, in effect, was First Republic.
There needs to be a new awareness. That is that the government is ultimately responsible for all money creation. The banks are simply their agents. The wiring of the system has to reflect that fact. That is not how it is right now. And those who are profiting from the pretence are going to hold on to it for as long as possible. It’s down to heterodox economists and those who really understand money to make clear that there are better choices to be made.
But the heterodox economists insist that banks don’t lend out deposits. They just invent the money by the act of making a loan. In which case having a run on deposits cannot kill a bank because they don’t use the deposits to fund their lending.
Yet FRC went bust because of a run on the deposit base. So the heterodox must be wrong. Which means they don’t really understand mony, doesn’t it?