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What does this mean to give individuals unsecured loans from the Fed? Who would trust a currency that does that? Your points are valid but they've been tried b
by neximo64 4y ago
What does this mean to give individuals unsecured loans from the Fed? Who would trust a currency that does that?
Your points are valid but they've been tried before in other countries and other times in the past, the late 1800s and the issue is then no one wants to use your currency and then wants to use Gold instead because they don't trust it.
- anon291 4y agoWhy is it any different to give an individual an unsecured loan rather than a large failed institution?
- neximo64 4y agoJust a few.. - Audited accounts - Following the required laws - Ability to have a capital buffer - Ability to have a risk team to manage risks/entire governance system and controls - Able to scale to millions of people - Ability to pay off entire unsecured loan on demand - Market based Credit rating - Market value of securities/ability to be sold and absorbed into other institutions - Ability to raise capital - Ability to change management entirely - Can live over 100 years even after its failed (accepting loan payments for example) - No personality traits/needs in the way of commercial transaction. - Self sustaining In its simple form, a group of individuals is a lower risk proposition than an individual. Banks jobs are to borrow short and lend long. So it also enables the basic structure to play out until the maturity term ends in a very predictable fashion. Even if the institution is failed it is far more capable and can still run and accept payments for loans around processes.