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It’s interesting to note that the banks that didn’t need bailouts and didn’t fail were more likely to both take deposits and act as investment banks. It’s also
by ch4s3 5y ago
It’s interesting to note that the banks that didn’t need bailouts and didn’t fail were more likely to both take deposits and act as investment banks. It’s also noteworthy that the contagion started in investment banks.
This may not refute the hypothesis completely, but it’s evidence pointing in the opposite direction.
- LatteLazy 5y agoI think ultimately people have to decide how they want to pay for their mortgages. We could segregate this sort of "retail" finance. Then it wouldn't really be affected by markets booming and busting. But it would be more expensive and less available. Or we can allow cash to flow from big institutions to small private borrowers. But then we have to accept that when an institution fails it's either bailed out or there is a credit shortage and small retail borrowers have to do without or pay a lot more for a while. That's the basic choice here. That's why Glass Steagell was repealed (in the mortgage space anyway). That's why the bailouts were "necessary" (politicians rightly judged people would rather bailout than see their mortgages spike).
- ch4s3 5y agoYeah I basically agree with that. I think trends in building, and other shifts in preferences for housing also drive a lot of this.