Re:Bankruptcy, not bailout, is the right answer
by mindslight on Wednesday October 01, 2008 @01:08AM
(#320398)
Home/business loans made by a savings bank are subject to the reserve requirements. If these loans turn out to be bad and cause bank insolvency, the amount isn't huge because we're dealing with first-order numbers mostly backed by collateral. When the FDIC steps in to repay depositors, no money is lost (besides the bank's investors).
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