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> It's not clear to me why regulators want to prevent mutually agreeable transactions from taking place. In general, because the regulatory functions are aware
by jasonwocky 16y ago
> It's not clear to me why regulators want to prevent mutually agreeable transactions from taking place.
In general, because the regulatory functions are aware of information asymmetries that could lead to large numbers of people transferring a significant amount of wealth to smaller number of other people.
Wealth concentration is expensive for society, because those who lose out do NOT give up their right to vote replacement money into their pockets. The more of them there are, the more likely they are to get society to cover some of their losses.
- RickHull 16y ago> In general, because the regulatory functions are aware of information asymmetries that could lead to large numbers of people transferring a significant amount of wealth to smaller number of other people. I doubt this is the actual principle upheld. You have just described the role of insurance, as provided over the last 300 years or so, as something regulators want to prevent. You have asymmetrical information and a massive pool of people transferring premiums to a smaller group (the insurance companies themselves). Then, when there is a payout, you have the smaller group transferring massive amounts to yet smaller individuals (the ones who experienced catastrophic loss).
- RickRoll 16y agoYou must be smoking the good stuff. Every time the US government bails out the few ppl with deep pockets and not the many ppl with voting rights.