I guess this is still the Wild Wild West era of Bitcoin; I'd wager plenty of banks got knocked off by bandits back in the day, too.
What happened to a bank's customer's funds if it got robbed prior to 1933?
What happened to a bank's customer's funds if it got robbed prior to 1933?
I met an ex bank robber once. He and his "gang" attempted to rob a branch that was near a factory. The factory employed a number of immigrants who were fond of cashing their entire paycheques on pay day, so it would bring in a lot of extra cash every pay day. They timed their robbery for when the payroll money was present.
Unfortunately for them, the scheme had been rumbled, so the payroll delivery was fake and the police were waiting in plain clothes for them. He was shot in the neck but survived and learned to play bridge in prison, and in the fullness of time was released, where I met him and heard his story.
Any ways... It seems quite possible to me that a bank could be robbed but remain solvent.
The nearly immortal protagonist often ends up being the banker in a small frontier towns. He routinely has to deal with mobs of people who attempt to "nationalize the bank" and are dumbfounded to discover that the bank does have all of the money in a safe.
Example: http://www.centralbank.ie/mpolbo/mpo/pages/reserve.aspx
Banks are typically capitalized by a variety of assets, of which cash is typically a small amount.
In addition, the bank typically has its cash holdings distributed at a number of different branches.
Your account at the bank is technically it's liability. Essentially, you've loaned your money to the bank with an option to redeem it at any point in time (demand-deposit account, or checking account) or up to some period of time after asking for it (time-deposit account, or savings account).
So, let's say a bank's branch is robbed of $10,000. What happens? The banks shareholder lose $10,000.
Let's say all the cash and physical assets at a branch is robbed. The bank will typically cover those assets with assets from other branches. The bank's shareholders swallow the losses. Sometimes the bank will sell additional shares, or some of its remaining real assets to help provide it with more liquidity so it can continue to cover funds requests by account holders.
Let's say a bank has all its assets in cash in a single branch location and that location is robbed, meaning the bank now has no assets left. That bank is now bankrupt. It goes to bankruptcy court and you are a creditor. Once the banks remaining assets are sold, you may get a few pennies.
This is a major failing of the existing bitcoin repositories. They aren't banks and so aren't regulated as such. They're just storage lockers where you hide your cash under a mattress. In the event of a theft or fraud... oh well! It'd be interesting to see someone get a bank charter and backup those bitcoin deposits with real capital.
Governments can and do offer an insurance system whereby they will ensure that customers receive a substantial part of their monies back - this aids against bank runs (where customers panic and all try to withdraw their money as cash and so cause the bank to implode).
http://www.fbi.gov/stats-services/publications/bank-crime-st...
If only people would understand this about school shootings and the like
"Number of incidents in which deaths occurred: 3"
all 3 were the perpetrators rather than employees / customers. On the other hand 2 hostages being the employee's family members is disappointing. It's really sad that people really do involve the families of targets just for a bank robbery.
http://www.allgov.com/news/unusual-news/robbing-banks-is-not...
"Using confidential data on the value of every bank heist in the U.K. from 2005 to 2008, the trio came up with an economic model of bank robbery.
They found that the average revenue from a British bank robbery in 2005-2008 was only $31,600, although excluding the one-third of robberies that came up dry boosts the average to $46,600. But those proceeds have to be divided among the gang, and while extra gang members raise the average take, the haul per person decreases.
The average take per person per successful job was $19,792, equivalent to less than six months’ average wage in the UK, although being armed increased revenues substantially. While that may not sound too bad, multiple jobs greatly increase the risk of arrest and incarceration, as 20% of heists ended that way.
Data from the FBI paint a similar picture. In 2011, there were 5,086 bank robberies in the U.S., generating $38,343,501.96 in revenues for the perpetrators, or an average of $7,539 per heist. Excluding the robberies where nothing was taken increases the average only to $8,457. Not only is the return low, the risk is high: out of 13 people killed during bank robberies in 2011, 10 were robbers."
Seriously, I don't see any comparison between this and a bank robbery. It's not like banks in 1933 were only just figuring out that they should lock the door where they stored the money, or that they should repair any holes in the wall, or even that paper walls, though they are quick to build, have a very bad record on security.
What are you talking about? People are still famous for being bank robbers, e.g. http://en.wikipedia.org/wiki/List_of_bank_robbers_and_robber... . FDIC insurance has nothing to do with robberies, it insures against banks going bankrupt.
Edit: See the response from raganwald
In most cases, even a large robbery wouldn't ruin a bank: They could borrow against or sell their mortgages to another bank for cash to pay depositors.
This is different than a safety deposit box: The fine print is that you are responsible for its contents and if the bank is robbed, they will not replace the contents or reimburse you.
So, if you put your life savings into gold and put the gold in a safety deposit box, you lose. If you put your life savings in a deposit account, you will be reimbursed unless the bank fails outright.
(Prior to the creation of the FDIC in the US or deposit insurance in Canada).