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Now imagine a banking system where banks can go bust without savers (with just cash on their accounts) having to worry. The aftermath of the global financial cr
by jcfrei 6y ago
Now imagine a banking system where banks can go bust without savers (with just cash on their accounts) having to worry. The aftermath of the global financial crisis would have been quite a bit different: Fewer bankers getting a bailout and more shareholders of big banks actually being held accountable for the unduly risk they took. The fact that a lot of people's money is debt on the balance sheet of a bank creates dangerous co-dependencies between let's say the investment banking and the classical private banking. There are many ways this can be addressed but CBDC are definitely one of them.
- laurencerowe 6y agoWasn't that the case with Lehman's? No savers affected yet still precipitated a huge crisis. Too big to fail.
- neilwilson 6y agoBanks can always go bust without savers being affected. You have a well documented resolution procedure for banks, which involves the shareholders taking a bath and HM Treasury recapitalising the bank using the Contingencies Fund. It is for the Bank of England to take the loss, not the depositors, since the Bank of England is regulating the banks.