Indeed, the attractiveness of banking is evidenced by the fact that 1,363 banks were chartered during the past decade, two-thirds since 1995, when bank credit demands began to intensify. Some small banks argue that they need enhanced deposit insurance coverage to equalize their competition with large banks because depositors prefer to put their uninsured funds in an institution considered too big to fail.
As I have noted, however, small banks have more than held their own in the market for uninsured deposits. In addition, the Board rejects the notion that any bank is too big to fail. In FDICIA, Congress made it clear that the systemic-risk exception to the FDIC’s least-cost resolution of a failing bank should be invoked only under the most unusual circumstances.