Re:The Real Cost of the 2008 Financial Crisis
by Eliezer on Wednesday September 12, 2018 @01:29PM
(#17971048)
It's a root cause of bank irresponsibility. If not for free FDIC insurance, a bank making risky loans would cause the cost of insuring an account at that bank to rise. Securitization does change this, but all the CDSs on AIG's mispriced insurance on CDOs were ultimately taking place against a background of too-big-to-fail and flat-priced government insurance.
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Re:The Real Cost of the 2008 Financial Crisis
by lovich on Wednesday September 12, 2018 @06:12PM
(#17973934)
Why would a bank spend any money on insurance to cover accounts in the event that they run out of money? That's just the end of the bank, they don't care at that point. It's not like the executive officers would have a chance of going to jail over it.