alt Hacker NewsWith the current concentration of wealth and banking, it almost seems like there is an incentive for banks to ruin themselves when they end up in a little trouble.
If the bank has trouble, shareholders/executives lose - if the banking system has trouble... then QE will solve the bank trouble.
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> If the bank has trouble, shareholders/executives lose - if the banking system has trouble... then QE will solve the bank trouble
It's a game of chicken, though. The folks at Lehman and SVB didn't cash out. JPMorgan did. (Both times. Actually, all of the times since 1907.)
That all relies on the assumption of petro-dollar, something that could have been taken for granted during the last 50 years but could easily change within weeks now.
When can qe start ?
IMHO, if QE solves the trouble, the Fed or treasury should be taking a bigger bite of ownership from the bailed out companies in exchange specifically to disincentivize taking risks with a bailout backstop.