4 ms·
Changing the rules during the game (full deposit insurance, one off advantageous loans to troubled banks) also erodes the moral by standing firmly behind reckle
by mihaaly 4y ago
Changing the rules during the game (full deposit insurance, one off advantageous loans to troubled banks) also erodes the moral by standing firmly behind reckless and risky (risky for the masses not self!) behaviour and entities, unlike the rest! For the rest the ordinary rules apply.
Rules don't metter from now on or what?!
- AdamN 4y agoThey didn't change any rules - they just followed the processes they already had - which was to declare the bank systemically important.
- mihaaly 4y agoTell it to other cases where deposits are lost above the insurance limit, tell them please to their face that the rules are the same and not changed ad-hoc.
- travisjungroth 4y agoI would, but I’ve been looking for a case where were over the limit deposits were lost and can’t find one. Also, if it’s before 2008, the laws were significantly changed and the rules wouldn’t be the same but not ad hoc either.
- mihaaly 4y agoExcept that there were no blanket federal guarantee in previous failures BEFORE some private institution acquired the remians of the failed bank and just then they CHOSE standing for full the deposit if they thought so (most of the cases). Not always, not for everyone. Private cas to case agreement not new central rule! The rule was only up to the limits of insurance and so The Enloe State Bank, Covenant Bank, NOVA Bank, Jasper Banking Company, Eastern Shore, Home Savings of America, and several more (all after 2008) where clients did not have the balance above the insurance limit. Do you have some incentive here attempting to mislead?
- heisenbit 4y agoBanking stocks are down as unlike the 2008 bailout capital is now at risk. Rules may matter but the Trump signed roll-back of Dodd-Franks removed these. This created an invitation to load up on risky assets which on aggregate are estimated 600B under water. We have removed rules preventing systemic risk. Now we face systemic risk. Crying for narrow rule adherence is not situational adequate.
- snickerbockers 4y agoits just going to keep getting worse and worse because there's no competitive advantage to responsible behavior. At this point you're a fool if you don't take unreasonable risks with your money.