For reasons presented in the preceding chapter, the state has not been as solicitous for the protection of depositors as it has for the protection of noteholders. Indeed, much of the protection to noteholders has been given to the direct detriment of the depositors. For instance, the segregation of some of the best assets of the bank (government bonds, prime commercial paper, gold, etc.) as specific security for outstanding bank notes, weakens the security for the deposits; giving noteholders a first and paramount lien on the assets of a failed bank has the same effect.
In countries other than the United States and the Netherlands, the protection provided for depositors by law has been only such as is provided for creditors of the bank in general - that is, such protection as comes by limitations on the loans and investments and business activities of the bank, by periodic examinations and careful supervision of the banks by a state or federal banking department, by prohibition of interlocking directorates, and so forth. As the volume of deposit business in the Netherlands is small, absolutely and relatively to the note issues, the United States may be said to stand alone among the deposit-banking countries in its efforts to give special protection to depositors.