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Banks failing is how it is planned to work? Zero oversight from agencies charged with keeping their eyes on them is how it is supposed to work?
by AmVess 4y ago
Banks failing is how it is planned to work? Zero oversight from agencies charged with keeping their eyes on them is how it is supposed to work?
- tptacek 4y agoYes. That is literally the reason we have the FDIC.
- NovemberWhiskey 4y agoWhether it's planned to work that way isn't so relevant as it is what is probably going to happen from time-to-time due to the fundamental nature of banks - at least, this is what Diamond and Dybvig believed when they published their model[1] back in 1983, concluding that deposit insurance is the better way to prevent bank runs than closing banks. Presumably they were onto something, as they jointly received the Nobel prize for economics last year for this contribution. [1] https://en.wikipedia.org/wiki/Diamond–Dybvig_model https://en.wikipedia.org/wiki/Diamond–Dybvig_model