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That's all well and good until a "too big to fail" institution fails.

• kelnos 4y ago
  The government, as we saw in 2008, won't allow those banks to fail. That's literally what "too big to fail" means. If the government doesn't have the ability to keep such banks afloat, then we have worse problems.
  • altairprime 4y ago
    By ‘afloat’, do you mean, “keep the depositors whole” or “keep the bank operating” or both? A lot of confusion centers around the assumption that any bailout will be for the bank’s operations, not for the depositor’s deposits. That’s perfectly valid confusion - historically it’s been the latter! - and the FDIC isn’t willing to talk about deposits yet, either.
  • teawrecks 4y ago
    Right, which is literally the argument against a small set of giant "too big to fail" banks.