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That may be true and I'm not arguing that it isn't, but at least where I've come to learn about it more concretely happening, it's always been the result of thi
by bmelton 4y ago
That may be true and I'm not arguing that it isn't, but at least where I've come to learn about it more concretely happening, it's always been the result of things like Operation Choke Point[1] or Redlining[2] which were pressure campaigns by the governments who regulate the banks. In the case of the former, it was Elizabeth Warren and the CFPB, while the latter was the FHA working through the FHLBB.
Banks are so inherently risk averse that even the most stalwart of them is likely to submit to even regulatory-coercive overtones, which effectively makes them arms of the government, but with enough "by proxy" to leap around constitutional hurdles.
[1] - Operation Choke Point: https://en.wikipedia.org/wiki/Operation_Choke_Point https://en.wikipedia.org/wiki/Operation_Choke_Point
[2] - Redlining: https://en.wikipedia.org/wiki/Redlining https://en.wikipedia.org/wiki/Redlining
- toyg 4y ago> Banks are so inherently risk averse ... that 2008 never happened. Banks are risk-averse when it suits them to be so.
- bombcar 4y agoRisk for a bank is having the government crawl up their various orifices, not losing money.
- hn_throwaway_99 4y agoThanks for this, especially the link about Operation Choke Point. But I think the details around Operation Choke Point give me confidence, not wariness. Yes, Operation Choke Point was government overreach, but when the truth came out: 1. US Congressional reps proposed laws to stop the practice. 2. The FDIC Inspector General and the DoJ investigated the operation. 3. The FDIC issued a letter "effectively ending the practice" in early 2015. 4. The government officially ended the practice in 2017. That is, IMO, government worked here: overzealousness came to light relatively quickly, was debated publicly, and was terminated.