The Ubiquitous Coverage Of A Rare Crime
The Gist
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The Debate About Deposit Insurance
If depositors in one bank to incur losses we're worried about runs at other banks then there is no limiting principle it is the entire banking system. The safest way that these regulators have of overseeing the system it just never to have any bank fail and I guess then you get into a problem of but if everyone knows that it creates all sorts of moral hazards and worse. Yeah and I should point out that at least for signature and SGB shareholders were wiped out non-depositor creditors were wiped out so this wasn't a bailout where the entire institution was saved.
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