How's this work? Aren't the bank's losses essentially people's deposits? Where'd the insurance money go then, or has it simply not yet been paid out?
In most bank failures a large fraction of the money is eventually recovered but it takes ages. Maybe you had $1M with a bank, the bank fails on Monday, $250k is FDIC insured, on Monday you can't get your money, this can be very disruptive. Can't make car payment, can't pay tuition, whatever. But hey by first thing Wednesday FDIC gives you access to $250k.
Six months later the people cleaning up the mess maybe give you $607 283 from selling the bulk of the bank's assets, and then six years later, when you've almost forgotten this disaster, you get a letter with a further $114 384.10 as the last bits and pieces were settled, and it turns out one of the hard to unwind bank investments was actually quite profitable, although it was supposed to pay much earlier. Congratulations, the vast majority of your money was "recovered". Not all of it, and not quickly, but bank failures generally do not mean there's an empty vault.
People would have a problem if they already have €120k tied up in a contract, such as a house purchase.
It would be a big problem if the lost money was intended for their pension.
From the article:
> Right now, it's unclear how or when victims will be repaid for losses. Broomes ordered "that restitution be finalized at a separate hearing within the next 90 days," the US Attorney's Office said.