None of your bank balances are 100% backed.
They aren't 100% backed in liquid USD owned by the bank. If that amount isn't enough during a bank run, federal insurance kicks in, to cover the rest.
Which is why not a single deposit dollar was lost in a bank collapse in the United States over the past, what... 40 years?
The crypto space can barely claim that sort of thing for 40 days.
The federal reserve will print money in order to inject liquidity into banks. This means they are creating money out of nowhere, inflating the currency, essentially taxing everyone holding USD in order to maintain the illusion that banks are solvent.
However, in the event of an actual, real-wold bank collapse, the Office of Thrift Supervision (OTS) will take ownership of the bank and sell the book to someone else. That's how WaMu's collapse in 2008 was mitigated (WaMu -> OTS -> JPMorgan Chase) without ever drawing on the BIF let alone the credit facility at the Fed.
Remember, the fractional reserve is where the supply of currency in the economy comes from so this is a pretty big misunderstanding of modern monetary policy. Dollars are backed by the obligation to repay the fractional reserve loans that created the dollars in the first place, and the entire social system on which it is built.
> As part of national fiscal policy response to the Great Recession, governments and central banks, including the Federal Reserve, the European Central Bank and the Bank of England, provided then-unprecedented trillions of dollars in bailouts and stimulus, including expansive fiscal policy and monetary policy to offset the decline in consumption and lending capacity, avoid a further collapse, encourage lending, restore faith in the integral commercial paper markets, avoid the risk of a deflationary spiral, and provide banks with enough funds to allow customers to make withdrawals.
> The Federal Reserve created then-significant amounts of new currency as a method to combat the liquidity trap.
As for the bailouts you were alluding to, they were managed at least in the US by the treasury, not the fed, and they were loans, not grants - that have since been repaid yielding $100B in profit, with more to come.
Fiscal policy and monetary policy are different things managed by different entities. Any new money that was created to support the stimulus was unrelated (after all the treasury could have apportioned any money) and has since blinked out of existence as the loans have been repaid.
Bank shenanigans have happened in the past, but at least the smaller accounts survived unscathed.
https://en.wikipedia.org/wiki/Washington_Mutual
https://en.wikipedia.org/wiki/HomeFed_Bank
(Somehow my family got caught in both of those, we weren't very good at picking banks heh)
In the WaMu case actually no money was lost by anyone - and they didn't even touch the Bank Insurance Fund. The Office of Thrift Supervision took control of WaMu and sold it JPMC.