If only there was a system, by which many of these institutions that hold other people's bitcoin, could protect the currency against individual institutions losing their clients' deposits.
I wonder what something like that might look like...
OP's link was about clients' bitcoin in hot wallets hosted by the bank/exchange. That seems to be a huge risk.
Recent events provide strong support for exchanges and banks to work with insurance houses and develop insurance products. Flexcoin shouldn't be shutting down and telling its customers "oh well" over their hot wallet theft; they should have an insurance policy paying out value to their customers.
I wonder what something like that might look like...
Maybe: http://www.fdic.gov/