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Can someone explain why normal everyday chapter 11 bankruptcy is not applied to banks? Why can't they wipe out the shareholders, sell off the assets, and pay t
by jpadkins 15y ago
Can someone explain why normal everyday chapter 11 bankruptcy is not applied to banks?
Why can't they wipe out the shareholders, sell off the assets, and pay the creditors from that?
- olefoo 15y agoThe facile answer is that it's simple corruption. The slightly longer and more nuanced answer is that allowing such a failure to happen would cause more chaos and disruption than is politically acceptable to our elite decisionmakers.
- onedognight 15y agoFirst paragraph: > The "merger" would completely destroy the value of BAC's common shares.
- rprasad 15y agoThat would instigate a bank run by BofA's account holders, and possibly bank runs by account holders at other banks worried about the stability of their own financial institution. In other words, total financial collapse of the American economy.