Well up to $250k wouldn’t be touched, but yeah, doing a clawback for a bank could cause a run on all banks.

Check out the Madoff documentary on Netflix, there are interviews with people who had exactly that happen as they clawed back funds to try to make everyone whole.

Madoff was an actual pyramid scheme; once criminal fraud enters the picture it’s a different story.

Not sure if this type of cynicism is more Reddit than HN, but somehow I suspect the rules are more likely to be written by the guy with the 5M deposits and his even richer friends.