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Ironically, 2008 caused banks to be very resilient to events like this one. Now banks are not allowed to keep large positions in their own name and should be ba
by lmilcin 7y ago
Ironically, 2008 caused banks to be very resilient to events like this one. Now banks are not allowed to keep large positions in their own name and should be basically neutral to whatever happens on the market. Banks are supposed to earn their living on services provided.
What this means for banks is they are doing excellent business right now.
The only significant problem is counterparty risk. As banks are basically insurers in case of some contracts they take the risk that the counterparty will default on their obligation. As large number of parties default this creates an amount of loss. But banks have also regulations to control the amount of possible loss so it is not going to be easy for any bank to bankrupt just because large number of companies go out of business.