4 ms·

Institutions should be allowed to fail, loose money and go bankrupt because of their bad decisions. Like everyone else in society.

• chewz 5y ago
  > Institutions should be allowed to fail, loose money They still can under this new law. They were just forbidden from providing cryptocurrency services to retail customers.
• croes 5y ago
  Institutions don't loose money, people do and most of the time not the managers but the customers.
  • makomk 5y ago
    Cryptocurrencies seem like the least of the problems with Chinese financial institutions selling unsuitable investments to retail customers though. Sure, they might lose everything they put in, but at least it stops there. The Bank of China managed to sell aggressively (and deceptively) branded and marketed oil-futures-based investments to ordinary retail customers who ended up losing more than their total investments. (Though they may have eventually given up on trying to claim back the extra from investors.)
  • oldgradstudent 5y ago
    This is crazy talk. Are you too young to have been here during the 2008 crisis? Almost the entire financial system was illiquid and insolvent, and would have collapsed without massive and unprecedented government intervention. And in all cases, management knew, or should have known they were lending money that would never be returned. For example, the reason "liar loans" were called that, was because the financial institution issuing the loans refused to check reported income even if the information was available. The name "liar loans" was common in the financial industry BEFORE the crash.
    • setum 5y ago
      > would have collapsed without massive and unprecedented government intervention would have, could have, but didn’t, that goes only to prove op’s point that institutions don’t lose money, especially the big ones.
      • MomoXenosaga 5y ago
        The government is an institution and they lost money. Entire banks were nationalised in a single night.
        • croes 5y ago
          Banks mean nothing. They shiftet their assets to other banks and nationalized mainly the debt. As a consequences they cut pensions, cut benefits and raised taxes on the middle class. The top 1% was spared and saved and got even richer in the crisis.
    • inter_netuser 5y ago
      It's still an open question if government intervention in 2008 was helpful or harmful. History will be the judge of that, far too early to tell. Several countries did not bail out their banks, and simply took them into recievership. Outcomes weren't much different.
      • AnimalMuppet 5y ago
        No, I don't think it's much of an open question. We have seen historically what happens in that kind of situation. That didn't happen in 2008. Also in 2008, we had an unprecedented government intervention. Now, you can claim that "this time would have been different", but the burden of proof is on you for that claim. Without that proof, the observations are "it didn't crash when it usually did, and the government intervention is what was different". Not quite proof, but very suggestive. You observe that some countries did not bail out their banks. But which countries? The US and big European banks are systemically important worldwide in a way that the banks of, say, Croatia or Egypt are not. (Not saying those are the countries you have in mind - I don't know which ones you're talking about.) If country X didn't have a real estate boom, and let some banks go under without bailout, it shouldn't have caused much damage.
• ericyan 5y ago
  https://en.wikipedia.org/wiki/Too_big_to_fail https://en.wikipedia.org/wiki/Too_big_to_fail
• Barrin92 5y ago
  The lesson China took from 2008, when they successfully avoided a financial recession and ensuing political chaos that was widely visible across the West was to start a campaign to clean up the financial sector. China is acutely aware of the risk that unregulated private finance poses to the security of the state but also the economy, and this is why they're hyper-vigilant when it comes to financial products, and I don't blame them to be honest. There is virtually no social upside to people YOLOing their live-savings into crypto. "Well people should be allowed to do stupid stuff" has never had much pull in China. It's not the US.
• canadianfella 5y ago
  Lose
• AnimalMuppet 5y ago
  I kind of like the way it was done in several instances in 2008. The shareholders are wiped out, the management is gone, but the institution was protected (and therefore the depositors were).