3 ms·

Because greed.

• missedthecue 5y ago
  I don't buy this. There are plenty of things a bank will not lend you money for. I can't get a 2 million mortgage for instance. I can't get a mortgage to buy undeveloped land. I can't get a loan to start a business. I can't get a loan to buy a business. Why is this very specific circumstance one where all risk parameters fly out the window? Why aren't they recklessly greedy in the other situations I list?
  • TigeriusKirk 5y ago
    I feel like you've asked a good question. I don't doubt the conclusions of the report, and I don't think the banks do either. Why, then, would they make what the facts indicate are bad loans? Greed is a partial answer, sure. This is hardly the only place where corporations trade risk in the distant future for revenue today. But my instinct is that the greater part of it is inertia. They make the loans because they've always made the loans and it will take a good deal of energy to change that. My guess is that it's an area where change will come as a short, very sharp shock. One year all the banks will make these loans and the next year none of them will.