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> There’s been some suggestion that these types of banks would lend to entities that might not otherwise be creditworthy I don’t agree with this argument as th

> There’s been some suggestion that these types of banks would lend to entities that might not otherwise be creditworthy I don’t agree with this argument as this is already a huge problem in private and commercial banking. Loan approvals getting pushed through by bank execs for friends already happens quite a bit, especially in more economically depressed communities. For a more publicly relevant anecdote, the current president defaulted on a loan he received from the real estate arm of deutsche bank, sued the bank, and then opened an account in DB’s private banking division which gave him a loan to pay back the debt he owed to the real estate division.[0] The argument that public banks would somehow be less ethical than private banks, who’ve also been caught laundering money for cartels and terrorist organizations, is laughable. 0: https://www.nytimes.com/2019/03/18/business/deutsche-bank-donald-trump.html https://www.nytimes.com/2019/03/18/business/deutsche-bank-do...

AnthonyMouse 7y ago
That's a completely different kind of problem. A bank president who steals from the bank has committed a crime and should go to jail, but one instance of an amount of money which is very meaningful to one person is peanuts to the bank. By contrast, if you make net-loss transactions systemically as a matter of policy, your bank is going to go bust. Which is not going to please the depositors/taxpayers/FDIC.
- save_ferris 7y ago
  I'm talking about POTUS, not the DB president. He's just one high-profile example of a bank lending to someone who wasn't creditworthy. Not to mention We're only 10 years past the worst financial scandal of a generation, which was caused precisely by underwriting mortgages for people who couldn't afford them. 465 banks failed in the US alone during this period[0], the exact scenario they claim that the public would fall into. The banks have absolutely no leg to stand on in terms of arguing that they alone can determine who should receive loans. They were the ones who blew up the economy 10 years ago and faced no consequences for it. 0: https://en.wikipedia.org/wiki/List_of_bank_failures_in_the_United_States_(2008%E2%80%93present)#2018 https://en.wikipedia.org/wiki/List_of_bank_failures_in_the_U...

AnthonyMouse 7y ago

That's a completely different kind of problem. A bank president who steals from the bank has committed a crime and should go to jail, but one instance of an amount of money which is very meaningful to one person is peanuts to the bank. By contrast, if you make net-loss transactions systemically as a matter of policy, your bank is going to go bust. Which is not going to please the depositors/taxpayers/FDIC.

save_ferris 7y ago
I'm talking about POTUS, not the DB president. He's just one high-profile example of a bank lending to someone who wasn't creditworthy. Not to mention We're only 10 years past the worst financial scandal of a generation, which was caused precisely by underwriting mortgages for people who couldn't afford them. 465 banks failed in the US alone during this period[0], the exact scenario they claim that the public would fall into. The banks have absolutely no leg to stand on in terms of arguing that they alone can determine who should receive loans. They were the ones who blew up the economy 10 years ago and faced no consequences for it. 0: https://en.wikipedia.org/wiki/List_of_bank_failures_in_the_United_States_(2008%E2%80%93present)#2018 https://en.wikipedia.org/wiki/List_of_bank_failures_in_the_U...