[icegreentea2]

The upsides are:

* Customers (both individuals and companies) get to generally continue to view banking as a high confidence, high trust activity. Consider the existing cost and friction of KYC and other due diligence measures which are imposed asymmetrically. Reduction to a low-trust environment would seem to double up the friction.

* SBV bought a shit load of longer-term US debt (which is apparently what did them in). Based on current fiscal habits, the US government needs to keep this debt attractive, especially to domestic buyers. There's nothing it can do about the risk of interest rates changing, but the last thing it wants is for depositors to put pressure on banks to avoid long-term US debt.