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The problem is that you can't let a bank fail, especially a big bank, it would bring the whole system with it. Since you cannot allow it to fail, you must set

The problem is that you can't let a bank fail, especially a big bank, it would bring the whole system with it. Since you cannot allow it to fail, you must set in place some rules to limit the risks they take. (Yes I know about the typo CDS=>CDO, I can't edit myself).

eru 17y ago
Or require them to split themself up? Or better --- withdraw state guarantees for all deposits. The customers will flee to higher quality.
- shin_lao 17y ago
  Provided they have enough information to make the right choice.