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The 2025 program thing said it encouraged irresponsibility of sorts--if a bank screws up, the FDIC bails them out.

This is the banks thinking that the bar against irresponsibility was set too high. But that presumes bailout if things go all pear shaped on them.

No FDIC, when the bank goes belly up it's at the mercy of market forces. Lots of banks failed. The Civil War was brutal on Southern banks. A bank crash in the 1870s wiped out a lot of them. The best they could hope for was that in bankruptcy a better bank would come along and buy up what assets they had, but investors, both those with deposits and those that owned stock, were very, very seldom made whole. But in the absence of that, the assets would just have been liquidated and a lot of people would have been entirely ruined. (Which is, in fact, what happened before the FDIC was established. Note that in discussion of how wealth was transmitted by banks in the 1800s often an account says "Bank A was bought up by Bank B," but leaves out that Bank A was usually pretty much drained of assets, of the wealth that moderns think was necessarily transmitted. )