This simple decomposition is the basis of the saying “We can lift our standard of living by either working harder, or by working smarter”. That is, we can do it by working more hours, or by lifting labour productivity. Lifting the hours we work can be achieved by higher labour force participation, which is something that has been happening over recent times.
The government provides a safety net to banks in the form of deposit insurance, and in return, banks are subject to government oversight that mimics some of the monitoring that the private sector would provide, absent the government safety net.