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If a bunch of banks go under at once, or even one big bank with a sufficient number of claims, who's to say the insurers will even be able to pay out on that? Nonetheless, I always find this type of apocalyptic thinking to be humorous - why do people think that their cash will be worth anything if the financial system collapses? Another motivation would be if you are concerned about having your assets frozen.



The central bank pays.

As an example, in the UK personal deposits of a failed bank are guaranteed by the Bank of England up to £75,000.

The Bank of England can always cover the amount, since they can simply print money as needed.

http://www.fscs.org.uk/what-we-cover/products/banks-building...


It's not insurers who pay it's the central bank. It has control over the currency itself; because of that it can (and has to) always pay.

> Another motivation would be if you are concerned about having your assets frozen.

I'm with you on that one.




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