The Seen and the Unseen - hosted by Amit Varma cover image

Ep 323: SVB, Banking and the State of the Economy

The Seen and the Unseen - hosted by Amit Varma

CHAPTER

The Importance of Deposit Insurance in Banking

Sebastian Coontz: The prevailing paradigm of public policy and government intervention in banks comprises these pillars. He says we have a banking regulator that will coerce banks to take risk; there is a mechanism for lending lender of the last resort, generally run by the central bank where you lend freely against good collateral at penal rates. And third, you stabilize the grandmothers and dentists using depositor insurance. So all over the world, instead of having a disruptive mess, you could have a normal bankruptcy code apply," he says.

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