When I was in college, I took a number of Econ courses, and I still remember the Macro Econ professor talk about banks failing. This was in the mid 90's. He flat out said that a bank failing is something that just doesn't happen anymore. He pretty much said, you'll never see it happen. This is before they repealed the Glass-Steagall act.

I still remember the mortgage crisis unfold in disbelief that they didn't see it coming. I worked in finance at the time, and I truly realize how fragile businesses (banks, etc.) are, and our trust in a number of things is completely unfounded. We have certain protections now, but I understood at that moment why people my parent's age (born during WWII) and older didn't trust banks, etc.

I had the same feeling. I remember the first time I looked at the accounts of North Rock (covering for a colleague at a small fund manager), the first British bank to fail (and the only one to go under rather than getting a bailout) and being horrified at its reliance on interbank markets.

A lot of British banks needed bailing out, but but building societies (mutuals owned by customers, traditionally mortgage lenders but mostly full service retail banks) were fine, but big banks and at least two former building societies that had demutualised were not.

From that point of view it sounds as though Bank of North Dakota sounds like another example of different ownership structures enabling greater stability than shareholder owned big banks do.

It was the banks holding MBSs that failed. Banks always hold mortgages. With Glass Steagal the investment banks couldn't have jumped in to do the rescues.