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But under the current system, banks also lose. Banks need to realize they are better off earning 80% now and helping the economy recover so they can earn 120%
by com2kid 2y ago
But under the current system, banks also lose.
Banks need to realize they are better off earning 80% now and helping the economy recover so they can earn 120% later, then earn 100% now and earn zilch later.
However I'm willing to bet there are some misaligned incentives within the large banks that prevent this from happening. (I only say that because misaligned incentives are seemingly the cause of 90% of the issues that plague the actions of any group of people beyond a couple dozen!)
- Projectiboga 2y agoYep the narrow focus on the next few quarters is a root cause of these short term focused blunders
- rincebrain 2y agoThere's a sort of prisoner's dilemma here, where the banks that don't take the 80% now make out better in both cases - they get 100% now and 100% later, or 100% now and 120% later, versus 80% now and 120% later.