Then it can't give you your own money back. Banking regulations, such as how much money it is supposed to keep in cash, are supposed to prevent this. In the UK, we also have the Financial Services Compensation Scheme, which means you're safe up to ￡85,000. All the banks pay into that to help each other out. My mother has more savings than this so she doesn't keep it all in the same bank. Now and again she wants to find another one and her accountant son (me!) helps her find somewhere she's happy to put it in. She also doesn't like Internet banking and wants it to be somewhere she can easily get at in our local town. When you're 75 and for most of your life that was the way you did it, I don't blame her one little bit. I'm 49 and remember the good old ways too. Mum has only just discovered the Internet because she was virtually forced into it from being on her retirement village residents' committee which swaps information by email. So my sister got her an iPad.

But it can still happen. I used to work in auditing further education colleges, and one I went to about 4 years ago was saving up for a new building. It was doing the right thing by spreading its money around but it put some of its money into an account with Landsbanki in Iceland. It looked like a good account BUT in the banking crisis of 2008 the bank collapsed and the college's money went down the hole with it. My manager was unsure how to write our report but I pointed this out to him:

1. They checked the bank out first with all the credit rating agencies.

2. They didn't put all their money in the same place.

3. They have sued and tried as hard as possible to get their money back.

Thank you for understanding, said the college finance director. Well, nowhere is TOTALLY safe and what else are you supposed to do?

What the UK government did with failing British banks at the same time was put government money in them so people's money would be safe. Unfortunately that created an even bigger government debt and trying to do something about that is what the current government is trying to do by cutting down on what it spends.

It shouldn't given deposit protections and reserves. It does happen though, which is why there are federal regulations on accounts that guarantee a given amount. For people with lots of money, it's a good idea to cycle it about to various institutions to avoid problems.

They never run out, but when in trouble, they borrow, or the Government bails them out.

it can't. By law, it must hold back x % of its deposits.

They print more