Systemic Threats, Supervisory Shortfalls
Moody's Talks - Inside Economics
00:00
The Moral Hazard of Not Forcing a Haircut on Large Depositors
If another bank fail, it's implausible to imagine that their uninsured depositors wouldn't be made hold. There's no way if you had the smallest bank in America fail and you had one person who had $1,000, they're going to take a haircut. Not at this point. That's, economists call that horizontal inequity to equal a Peter Thiel had 50 million bucks in Silicon Valley bank. He's getting all 50 million of that.
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