My point is that you can sue a dealership which sells you a car with manipulated mileage. In addition, a dealership that does this systematically will go out of business relatively quickly (no one will buy cars from them). Why don't those things happen to banks?
They do. It is called a run. Then anything left is bought for next to nothing by a larger bank, and there is then even more opportunity for collusion as there are now less players at the table. It's been going on for a while now and in history seems to be the general trend apart from during those brief times when it is reversed for a while by the invention of new markets and financial technologies.
Albeit, this is only my probably wildly inaccurate and hastily sketched opinion.
