> In practice, people don't want to take risks that are irresponsible Yes that was the same argument used by Alan Greenspan when he said investment banks dont

> In practice, people don't want to take risks that are irresponsible Yes that was the same argument used by Alan Greenspan when he said investment banks dont need regulation because they wont take risks that are irresponsible, yet Lehman and Bear Sterns and others imploded because they did not understand the risks. This is precisely why you should not socialize the losses, if they fail let them fail or else you regulate them so they they dont take excessive risks. > It was the complexity of valuation that reduced the short term liquidity It was so complex that the bankers themselves did not understand it.