Increased opportunities for asset diversification, both domestically and at the global level, would provide additional welfare gains. BIS central bankers’ speeches  15  –  Third: Finally, further broad efforts are needed to strengthen and close gaps in the global financial safety net, and avoid the need for costly and distortionary reserves accumulation.
To be sure, uninsured deposits are more expensive than insured deposits, and bank costs would decline and profits rise if their currently uninsured liabilities received a government guarantee. But that is the issue of whether subsidizing bank profits through additional deposit insurance serves a national purpose.