What is the criticism leveled against deposit insurance by the FDIC?

What will be an ideal response?

Depositors who are freed from any risk of loss from a failing bank will not bother to shop around for safer banks. This problem is an example of what is called the moral hazard problem: the general idea that, when people are well-insured against a particular risk, they will put little effort into making sure that the risk does not occur. In this context, some of the FDIC’s critics argue that high levels of deposit insurance actually make the banking system less safe.