Banking Quote by H. L. Mencken
![“The federal [bank deposit] insurance scheme has worked up to now simply and solely because there have been very few bank failures. The next time we have a pestilence of them it will come to grief quickly enough, and if the good banks escape ruin with the bad ones it will be only because the…” quote by H. L. Mencken](https://sms4smile.com/quotes/img-quotes/2db/h-l-mencken-245_banking_the-federal-bank-deposit-insurance-schem_1553577.jpg)
“The federal [bank deposit] insurance scheme has worked up to now simply and solely because there have been very few bank failures. The next time we have a pestilence of them it will come to grief quickly enough, and if the good banks escape ruin with the bad ones it will be only because the taxpayer foots the bill.”
About This Quote
Source Speech: Economic Commentary, 1930s
The stability of deposit insurance depends on few bank failures; a wave of collapses would overwhelm it and burden taxpayers.
In simple terms: Deposit insurance works only while banks stay healthy.
Key Takeaway
Prepare for systemic risk.
Themes
financial stability
government policy
taxpayer burden
Mood
cautious
analytical
Type
policy
economic
When to use this quote
- banking crisis
- policy planning
- tax budgeting
- public debate
Key Concepts
risk management
moral hazard
regulatory design
Questions to Reflect On
- How can we design insurance to handle widespread failures?
- What safeguards protect taxpayers?
A Different Perspective
If many banks fail, insurance may become unsustainable.
![“By profession a biologist, [Thomas Henry Huxley] covered in fact the whole field of the exact sciences, and then bulged through its four fences. Absolutely nothing was uninteresting to him. His curiosity ranged from music to theology and from philosophy to history. He didn't simply know something…” quote by H. L. Mencken](https://sms4smile.com/quotes/img-quotes/f46/h-l-mencken-245_absolutely-nothing_by-profession-a-biologist-thomas-henry-h_5368.jpg)
