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The banks paid back their bailout loans, with interest. There was no way the borrowers who got those no-doc loans in the mid-00s could have ever paid off those
by brainwad 8y ago
The banks paid back their bailout loans, with interest. There was no way the borrowers who got those no-doc loans in the mid-00s could have ever paid off those loans. Bailing out the borrowers would have actually cost money, and would have created enormous moral hazard.
- bradleyjg 8y agoHow about the moral hazard of teaching an entire generation of bankers that picking up nickels in front of a steamroller is a great career move with virtually no risk of personal consequences?
- brainwad 8y agoIt's bad, which is why after the crisis the Dodd-Frank act was passed to reduce the chances of too-big-to-fail entities failing. So while we taught them they'd be bailed out, it's much less likely they can get themselves into that situation again.