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The issue is whether checking accounts at chartered banks are “market choices” for which there should be “consequences.” The banking system is so regulated beca
by closeparen 4y ago
The issue is whether checking accounts at chartered banks are “market choices” for which there should be “consequences.” The banking system is so regulated because when we lived in that world, it was a bad time, and collective action to make banks reliable was in everyone’s interest. If we are back to “stupid depositors deserve what they get” then what exactly is bank regulation for?
- wpietri 4y agoBank regulation's job is not to create a magic world of unicorns and rainbows. It's to a) keep regular folks from losing their shirts due to the shenanigans of the rich, and b) to prevent systemic risk that could harm the wider economy. Banks make money through risk. Sometimes those risks work out and people make money. Sometimes those risks don't work out and banks fail. This is capitalism 101, and to the extent banks are capitalist enterprises, there's no way around it. Government's job here is just to limit the damage. If you want banks to be perfectly safe, then you are arguing for government-chartered, not-for-profit, non-capitalist banks. These are things that exist, but we don't have them here in the US. We could, if you really want people with millions in cash to have someplace perfectly safe to park their money, you can certainly argue for their creation.