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I don't think the majority of bank failures work that way.



Now they don't. But bank runs were common in the past: http://en.wikipedia.org/wiki/List_of_banking_crises


The "Calculated Risk" blog reports on bank failure, and even in 2010 (11?) when literally hundreds of banks failed there were only a couple cases in which the FDIC had to pay anything out.


How does that reconcile with this article: http://online.wsj.com/news/articles/SB1000142405274870439650...

which states that "The fund had a balance of negative $7.4 billion as of Dec. 31, though that was an improvement from the $20 billion hole it was in at the end of 2009."




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