The Stigma of the Discount Window

When loans are repaid or loans are defaulted on money is extinguished. But if you have like a hundred billion dollar failure, and then the Fed comes in and has twenty five billion dollars in swap lines, the net total is still negative. So people are going to lend less in the private sector if people are getting bailed out. The contagion will spread because it's not a contagion on a balance sheet. These banks are solvent. I believe they're solvent.