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Sure. It's Robinhood's money, which they're choosing to lend to their customers. So Robinhood can bear the consequences if the loan can't be repaid. (As others
by theseatoms 9y ago
Sure. It's Robinhood's money, which they're choosing to lend to their customers. So Robinhood can bear the consequences if the loan can't be repaid. (As others have pointed out, they have ways to protect themselves. Margin calls, forced liquidations, etc)
- rtx 9y agoAnother more clever way is to deliver shares from their own pool.
- smaddox 9y agoIs it Robinhood's money? Are they required to maintain reserves to cover 100% of the loans they issue? If not, then it's not their money.
- theseatoms 9y agoGood point. I sure hope that they're required to hold 100% reserves on loans. I'd like to see an end to fractional reserve banking. That's not unique to Robinhood, but part of a much larger conversation—one that more people should be having.