You don't understand. If they go bust, that's it. The goal is to get big enough by skirting regulation and then welcome it. Think about it, if the regulators te

You don't understand. If they go bust, that's it. The goal is to get big enough by skirting regulation and then welcome it. Think about it, if the regulators tell them and how much they should hold in reserves, much like they tell the banks, they essentially bootstrapped themselves into too big to fail. In 2008 all the regulators were fine with CDOs rated triple-A and having the applicable capital ratings of a very safe asset. And when it all blew up, they stepped in and made sure no one went under and they could continue operating as they did in the past. Fun fact, a lot of those CDOs were on bank's balance sheets and marked down during the crisis but recovered over the last ten years. Not recovered to par, but recovered significantly. So there still exists some trading in the asset and banks still hold a fair chunk of it. So what traders do is they steadily mark up the valuation of these assets to smooth out and boost their P&L, which affects their bonus (which is often times already in the millions). There's a treasure trove of interesting content in this lawsuit from a BAML managing director that sued for discrimination because her total comp was only 2 - 2.5 million a year. [0] > Until recently, the secondary trading desk owned, along with CLO’s, $4 Billion on the BAML balance sheet of TruPS CDOs and ABS CDOs which positions were acquired during the 2008/2009 time frame. These positions have been mismarked for years in order to ensure P&L every year. Trepanier and his traders have daily fights about marks (where the bonds are priced) with Pricing (another department who marks the Bank’s securities to the market price). When going through their business after being promoted, Messina asked Trepanier about the marks he had on the Bank’s trading positions. Trepanier boldly responded, “It is an annuity so that the trading book produces revenue every year.” [0] https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/rCaslipPosIk/v0 https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/rCaslipP...