| Banking seems a lot like a gambling except that it's heads you win and tails they lose. Lend big into a property bubble and you'll be rewarded with colossal bonuses. The bubble bursts, loans go bad and the share price collapses. However the main banks banks are considered too big to fail and the taxpayer has to bail them out. Bonuses (smaller ones) for exceptional performance continue to be the norm, rolling heads the exception. Why don't the shareholders get rid of their employees, the bankers who have overseen the collapse of their asset? The shareholders are Pension funds who, while they ostensibly have the little peoples'interests to preserve, are actually run by people from the same gene pool as the bankers themselves. These people sit on one anothers remuneration committees. Dog does not eat dog. |
Unfortunately, if you remove deposit insurance (or any of its variants), people's savings once again become subject to the self-fulfilling whims of insolvency or the unfounded rumour of insolvency.