How does a bank work and what makes it more risky than other organisations?

Answer 1

All depends what country you live in. Here (Canada) the government has rules and regulations and standards. They are very strictly enforced, for 30 some million people here we have 5 major banks (brands), no one can just open a bank...therefore they never fail here. Downside is, interest rates are not as high as an independant bank would be, but your money is safe.