>> As such a certain amount of default well above zero is optimal to maximize the amount of real world value being generated. Someone who had worked in banking

>> As such a certain amount of default well above zero is optimal to maximize the amount of real world value being generated. Someone who had worked in banking once told me they adjust lending standards to maximize profit. I was shocked that this meant about a 6-7 percent default rate on the mortgage loans. If you are too stringent you won't lend any money and if you let it flow freely you'll fail under all the defaults, so yes there is an optimal amount of failure even for the lender.