They should be reassured that the benefit of the substantial subsidy that comes with virtual 100 percent deposit insurance is even more entrenched because the consolidations that are sure to follow from the Interstate Banking and Branching Efficiency Act of 1994 will result in more banks that are too big to fail. This law will even give the bankers a bit of the regulatory consolidation they having been asking for. Finally, though I recognize the burdens of consumer supervision and regulation, they are a small price to pay for all these benefits. I would add a word or two of sympathy for banks, but only for some. The benefits of deposit insurance and burdens of supervision and regulation are disproportionate among banks.
Deposit insurance is particularly perverse because it rewards bad banks more than good banks.
Although the Community Development and Regulatory Improvement Act of 1994 offers some relief to small banks, the cost of the supervision and regulation burden, particularly consumer supervision and regulation, is inversely proportionate to the size of the bank. I'll leave you with one final thought. If the devil approaches you with a bargain, tell him you want a deal like he gave the bankers.