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by iudqnolq 1200 days ago
What you're missing is the bailout is part of the system, and counts towards its stability.

In your analogy imagine your SAAS product horribly crashed and deleted customer data. So your cloud provider restored from the backups you had arranged and you were running normally soon after. Not ideal, but you had a far more stable system than someone without backups.
2 comments
mtlmtlmtlmtl 1200 days ago
No, this is not how reality works.

Asserting that bailouts are simply "part of the system" is just a cop out.

It doesn't respond to points about the behaviour of the bank which was key to my argument. Maybe read and try again.

I will repeat again at the risk of sounding like a broken record. There is no sane, logical way of arguing that the behaviour that led to the 2008 financial crisis is that of a stable, well-regulated banking system. If you believe otherwise, you are either on drugs, or have done no research, or both.

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Karunamon 1200 days ago
That only matters if you think that capability to be "bailed out" is legitimate in the first place. There is a pretty good argument to be made that allowing institutions to be "too big to fail" is directly enabling a lot of bad behavior, behavior that wouldn't happen if there was an understanding your bank can fail and you will not be compensated as a shareholder, only as a depositor under FDIC
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