We are in this situation because there is TOO MUCH regulation.
Banks were forced to buy low-yield long-term bonds, precisely because of the dumb accounting exceptions for those bonds (you can post the full value of a mature bond, regardless of its current price in the market).
On top of that, central banks are bailing out everything, which removes incentives for people to inspect the banks they are dealing with.
There is no free market, every single country is becoming a socialist nightmare.
Limited insurance like FDIC is not necessarily a bad thing. We can accept that sacrifice as a society and pay for it with some inflation. But FULL INSURANCE basically makes banking business obsolete, why not just deal with the FED directly through a CBDC?