Too Fast to Stop: Uninsured Deposits and Bank Runs (S1 E3)
- Jun 29
- 2 min read
Updated: 5 days ago
In Episode 3 of Banking Bad, our guest is Eric Spitler, a law professor at the University of North Carolina and former Director of Legislative Affairs at the FDIC and the SEC, for a timely discussion about one of the oldest threats in banking: the bank run.
From Continental Illinois to Washington Mutual to Silicon Valley Bank, Eric shows how uninsured deposits have repeatedly turned institutional anxiety into system-wide risk. Eric explains why the old distinction between “stable” branch deposits and “volatile” brokered deposits no longer captures today’s dynamic. In a world where a depositor can instantly move $50 million from a phone, the real question is not how the money arrived at the bank—but whether the depositor has any reason to stay.
The discussion then turns to the difficult policy choices surrounding modern deposit insurance, including whether business payroll and operating accounts have become the Achilles heel of the system. Would broader protection reduce dangerous runs, or create too much moral hazard? The episode also looks beyond banks to money market funds, private credit, stablecoins, and tokenized deposits where similar run dynamics can easily emerge. It leaves listeners with a central question: if runs are now faster, more contagious, and more technologically amplified than ever before, are our crisis-management tools keeping up?
Eric Spitler is currently an Adjunct Professor at the University of North Carolina School of Law where he teaches a class on “The Law of Financial Crises.” He also has a consulting firm, Delverton Strategies, that focuses on financial regulatory issues.
Previously, he was a Special Advisor to the CEO of the Financial Industry Regulatory Authority (FINRA). Prior to that he was the Director of the Office of Legislative Affairs of the Federal Deposit Insurance Corporation (FDIC) for many years, including during the 2008 financial crisis. Mr. Spitler also served as Counselor to the Chairman and Director of Legislative and Intergovernmental Affairs for the U.S. Securities and Exchange Commission following the 2008 financial crisis.
Mr. Spitler received his J.D. from the University of North Carolina School of Law. He graduated summa cum laude from Furman University with a B.A. in political science.