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No. Any bank with sane procedures would never approve such a thing.
by Kenji 10y ago
No. Any bank with sane procedures would never approve such a thing.
- acedinlowball 10y agoCan you share more of your experiences working in the banking industry?
- Kenji 10y agoSure, what do you want to know? My time at the bank was brief (I like tech more) but I got at least some insight.
- grzm 10y agoDefinitions of sanity aside, whether or not its a "good" idea is a matter of perspective. The 2008 financial crises showed how a lot of money can be made with no real repercussions approving loans, so probably looked like a very good idea to those who profited. Same with the S&L crisis in the 80s and 90s.
- Kenji 10y agoI worked at a bank before, throughout and after the 2008 financial crisis. That bank wouldn't have dared to give a broke and jobless person a loan, not a penny. Unless there are good reasons to assume it can be paid back, like securities in the form of a house or shares.
- grzm 10y agoI know of banks that wouldn't have approved loans like that, either. However, some banks did, and made money doing so. Many banks don't keep the loans they approve on their own books.
- Kenji 10y agoMany banks don't keep the loans they approve on their own books. That is dirty, dirty business. Giving out loans that will never be paid back, bundling them up and selling an opaque package full of risks. They said that was a big part of what started the crisis. I'm glad I wasn't part of that.
- grzm 10y agoYup. I completely agree. And there were a lot of steps in the chain. As I understand it, it wasn't the issuing banks that were doing the bundling: they just sold the loans to other financial service companies. Given the amount of money and the fact that a lot of them effectively got away with it, from their point of view it was good business. This is an example of situations where I see arguments along the lines of "it was legal, so it wasn't wrong". Grr...