Because even a single dollar disappearing from someone's bank account will drastically decrease confidence in the US banking sector. Modern society requires people to trust banks, if everyone tries to pull their funds and hide it under their mattress we are fucked.

As opposed to decreasing trust in the government, which will now be seen as an institution that takes money from normal people and allocates it to those who confuse real money with Monopoly money.

“Any losses to the Deposit Insurance Fund to support uninsured depositors will be recovered by a special assessment on banks, as required by law.”

I don’t think they have a choice. Congress decided for them.

The losses to the fund have to be recovered via special assessment.

The magnitude of losses to the fund is discretionary.

I don’t think the accounting of losses to the fund is actually discretionary, if they lose money they have to report it, they can’t just re-define the fund as marginally smaller than it was before. I don’t think I understand what you mean.