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No one buys a 10 million dollar, 30 year bond from a bank with 34 million in assets. It’s disingenuous to claim that all banks are equal in terms of capabiliti
by jonathankoren 7y ago
No one buys a 10 million dollar, 30 year bond from a bank with 34 million in assets.
It’s disingenuous to claim that all banks are equal in terms of capabilities, assets, or risk.
- dmoy 7y agoAgreed, but you certainly do it from a bank in Germany that isn't dbag. And if you're not dbag it's not such a sure thing that the government will come and save you. Or say in the US, you'd buy that from US Bank, which isn't in the big 4 consumer, or top few commercial, and it could be let to fail. It's still safer than a tiny bank, but it's not as safe as government bonds. That's all it really boils down to - you pay a bit extra to get more safety. You may be comfortable depositing $10MM in a US Bank reg D account, but I would not be. Well actually for US Bank specifically I might because I know their business model is incredibly conservative. But replace that with another large but not big4 bank.