The central bank, mandated as a lender of last resort (i.e. responsible for bailing out banks in precarious financial positions) for the fractional reserve banks distorts incentives and encourages them to take on excessive risks with customer deposits.

Consequently, bank losses under the excuse of being too big to fail are nationalized, shared and funded by the general population through the debasement of the currency (i.e. the expansion of the money supply).

#Bitcoin fixed this.