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Woah... This is an extremely naive view of "banking safety." FDIC limits provide absolutely zero protections for bank investors. Buffett isn't worried about th
by scoofy 3y ago
Woah... This is an extremely naive view of "banking safety." FDIC limits provide absolutely zero protections for bank investors.
Buffett isn't worried about the customers, he's worried about these investors (himself). Executives can still trivially crash a bank, bankrupting investors, by putting their own earnings targets above what are long-run, safe strategies.
This is the principal-agent problem: https://en.wikipedia.org/wiki/Principal%E2%80%93agent_problem https://en.wikipedia.org/wiki/Principal%E2%80%93agent_proble...
- YeBanKo 3y agoHe invested in Apple, not Goldman Sachs. If the latter defaults on deposits, it a damage to reputation damage, sure. But again, cap on balance and FDIC insurance should ensure that customers would get their money back and it probably would not even affect other services.
- scoofy 3y agoAhh... yes, I see now, fair point