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These were essentially secured loans offered by the bank against funds that had already been deposited. I'm definitely not a fan of Cayman Island banking nonsen
by StanislavPetrov 3y ago
These were essentially secured loans offered by the bank against funds that had already been deposited. I'm definitely not a fan of Cayman Island banking nonsense, but it seems rather unfair to seize the deposited funds that secured the loan and still try to enforce repayment.
- hamandcheese 3y agoIf the loans are no longer secured, then is there any reason to pay? Can payment be forced in any way? If the bank repossessed my house, for example, I would not continue paying my mortgage.
- LargeWu 3y agoThe loans will be sold off, and they will have to pay whoever buys them.
- StanislavPetrov 3y ago>If the loans are no longer secured, then is there any reason to pay? The same reason there is to pay any debt. Damaged credit, judgements, seizure of assets.
- Ensorceled 3y agoImagine what would happen if you didn’t have house insurance and your house burnt down. Would you expect the mortgage to be waved because the security (the home) was now seriously devalued?
- crazygringo 3y agoI agree with you, but in this analogy it was also the bank that set your house on fire in the first place. Which is what makes it less intuitive to separate the two.
- Ensorceled 3y agoWell, except the depositors chose to put their money in uninsured accounts.
- crazygringo 3y agoYes... I was agreeing with you. That's already the part of your analogy where you said "if you didn’t have house insurance".
- Ensorceled 3y agoI was disagreeing with your quibble in your agreement :-)
- xhkkffbf 3y agoYes. I can even imagine some extreme nonsense where the regulators call the loans because they're not backed by collateral any more.