Okay... where would you store 16m?
The reason is that since the government owns this bank, and the government issues the money, if the bank fails the government fails too and the money is now worthless anyway.
For that to fail, the whole world economy would need to fail as well, and at that point, no money on any currency is worth anything.
That way if something goes awry, I still have the rest.
But it's still in a bank account, so if the bank goes under you're screwed. See my other comment in this thread though...
The Securities Investor Protection Corporation (SIPC) was created to protect against the loss of customer assets at brokerage firms. SIPC offers protection of up to $500,000, including a $250,000 limit for cash, if a brokerage firm fails, and covers most types of securities, such as stocks, bonds, and mutual funds. [0]
[0] https://www.schwab.com/public/file/P-3042070/Asset_Protectio...
For regular bank account, there are no other underlying assets, it is just the sum bank owes to the account holder. If the bank becames insolvent, outside of insurance limits, these are just claims against the bank.