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unixronin: Galen the technomage, from Babylon 5: Crusade (Default)
Unixronin

December 2012

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Thursday, October 2nd, 2008 12:06 am (UTC)
The downside to FDIC insurance is that banks can do stupid shit without having to pay higher insurance premiums. Some banks are responsible, others are stupid, but they all get the same coverage, and the costs are spread out. There is no feedback mechanism for underwriters to signal banks to take fewer risks, so there are fewer costs involved with granting foolish loans. That's part of how we got where we are today.
Thursday, October 2nd, 2008 12:58 am (UTC)
You have a definite point.

On the other hand, it protects the small investors er ... depositors from bank failures. (Temporary brainfart there.) On balance, I think it's a win.
Friday, October 3rd, 2008 03:37 pm (UTC)
Oh, I'm all for insured accounts, it's just that I don't think banks should be treated the same regardless of the risks they take.
Friday, October 3rd, 2008 04:09 pm (UTC)
And you won't catch me arguing with that. Protect the depositors, sure. The bankers who created the problem? Let'em sink as they deserve.