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> Do we even need monolithic financial entities in this day and age? Four letters: F.D.I.C.
by pc2g4d 12y ago
> Do we even need monolithic financial entities in this day and age?
Four letters: F.D.I.C.
- eru 12y agoWhat do you want to say? That FDIC forces institutions to be large? Or that FDIC is a large institution and that we need them?
- pc2g4d 12y agoMy point was that banks are still useful because they get federal deposit insurance, while Silicon Valley startups apparently don't.
- ensignavenger 12y agoI don't see any reasons why a silicon valley startup couldn't. Lots of small bank startups sprout up all over the country. Also, Simple.com was a startup (they are now part of a very large bank) that got FDIC insurance through a partner bank.
- prostoalex 12y agoIn theory it shouldn't be too hard for a private insurance company to develop a similar product if there was enough interest from startups.
- setpatchaddress 12y agoI'd love to hear you expound on that theory. I find it really unlikely that anyone would trust a private corporation in that role.
- prostoalex 12y agoPrivate corporations already underwrite bonds (and related debt products like pensions, corporate loans, annuities or mortgages). A deposit in a bank is not completely different from a customer loaning money to the banking institution (at low or zero interest) in exchange for on-demand funds availability.