In Brief: When Should Banks Be Saved? (with Sheila Bair)
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Is This a Safe Resilient Banking System?
I think the banking system is basically sound. I think regional banks and mid-sides banks are basically sound. But you create this systemic risk exception as a rationale to bail out very rich uninsured depositors. I think you set off alarm bills for people and I don't think that's right. If it had been clear to them with absolute certainty that it would be a 10% haircut, it might have been different. There were a lot of analysts over the weekend disseminating analysis saying the haircut would probably be around 10%. They're actually private sector participants setting up markets to go ahead and buy the uninsured claims in order to monetize the uninsured claims. Well, you know, just look
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