yes, obviously all of the bank's money comes from consumers. what other scenario do you see where a bank(etc) "eats the loss" but the money somehow comes from somewhere else

While it may be obvious to you that your fees include covering all the banks losses to fraud, I think that most people assume the bank makes less profit or something due to such incidents, when the truth is they just raise their prices to maintain profits.

If the rate of fraud reduced bonus payments to executives.