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Exactly! I like the analogy of: When the bank is giving you a sub-prime loan, who is more sophisticated in that transaction? If the bank (with their fancy ri
by nickpinkston 6mo ago
Exactly! I like the analogy of:
When the bank is giving you a sub-prime loan, who is more sophisticated in that transaction?
If the bank (with their fancy risk models, etc.), why shouldn't they be the party to take the bulk of that risk?
- gunapologist99 6mo agoIn the United States at least, a bank who is offering a subprime loan is taking the bulk of that risk. Student loans are guaranteed by the federal government. That is not the same thing at all.
- nickpinkston 6mo agoDuring the 2008 Crisis, it was mortgage holders who got fucked and banks made whole, so risk asymmetries go far beyond just student loans.