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If we don't help depositors then bank runs at other banks are more likely. That hurts everyone, including yourself if the contagion gets really bad. If helping
by twblalock 4y ago
If we don't help depositors then bank runs at other banks are more likely. That hurts everyone, including yourself if the contagion gets really bad.
If helping depositors also ends up helping the bankers, we still have to do it.
In cases like this, people need to set aside moral outrage and look at what will actually happen.
- greenthrow 4y agoI'm not arguing about FDIC insurance. Anyone who deposited beyond what was insured knew the risk they were taking.
- bagels 4y agoEveryone's evaluation of the risk will dramatically rise if the depositors are not bailed, increasing the probability that this happens at the next bank, and so on.
- hedora 4y agoIn the past, the FDIC has always made depositors whole. If that changes, then many, many people will start moving money around to compensate.
- MrMan 4y ago[flagged]
- plutonorm 4y agoWhat is worse is we allow the mistakes to go unpunished - because then we will have more episodes like this down the line. If there are no consequences then the bad practise will continue. Anything that breaks away from the survival of the fittest is abdication of long term success in favour of short term stability. I don think that is a good trade for the system as a whole.
- biorach 4y agoYou're confused about what's going on here. Only depositors are being bailed out.