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When Is A Bank Too Big To Save?

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We have heard many people say that so and so institution is too big to fail. However, given the impact on the public finances it has occurred to me that some of these institutions may actually be too big to save. Given that there could still be a huge amount of leverage to be unwound is it possible that a point may be reached at which someone say, "It cannot be saved?"

I am guessing that that would not be a good moment for the economy either. What would the impact be? Would we need a new economic model and if so how do we design, develop and introduce it?

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We have heard many people say that so and so institution is too big to fail. However, given the impact on the public finances it has occurred to me that some of these institutions may actually be too big to save. Given that there could still be a huge amount of leverage to be unwound is it possible that a point may be reached at which someone say, "It cannot be saved?"

I am guessing that that would not be a good moment for the economy either. What would the impact be? Would we need a new economic model and if so how do we design, develop and introduce it?

They aren't too big to fail and if they did someone else would buy up the assets and operation, even if that someone else is the taxpayer. At least then the bankers could be fired rather than "retired" on massive pensions.

Banker/globalists want it both ways. To trouser the profits in good times, but be kept in well paid jobs and pensions when it doesn't and for their losses to be underwritten by the taxpayer.

No other reason. That's not high capitalism works. Its about "them"being allowed to hang on to their ill gotten gains, regardless. After all if we made bad business decisions, we would expect to loose our houses, and be made bankrupt.

I also don't buy the "banks too complicated for anyone else to understand" garbage. If its that complicated that only a few understand it, then that is sufficiently good reason for winding down that institution.

Unless a banker can explain on sheet of A4 how their business model works, then it should be wound down.

They are worse than "robber barons."

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They aren't too big to fail and if they did someone else would buy up the assets and operation, even if that someone else is the taxpayer. At least then the bankers could be fired rather than "retired" on massive pensions.

Banker/globalists want it both ways. To trouser the profits in good times, but be kept in well paid jobs and pensions when it doesn't and for their losses to be underwritten by the taxpayer.

No other reason. That's not high capitalism works. Its about "them"being allowed to hang on to their ill gotten gains, regardless. After all if we made bad business decisions, we would expect to loose our houses, and be made bankrupt.

I also don't buy the "banks too complicated for anyone else to understand" garbage. If its that complicated that only a few understand it, then that is sufficiently good reason for winding down that institution.

Unless a banker can explain on sheet of A4 how their business model works, then it should be wound down.

They are worse than "robber barons."

Perfectly put.

The only companies getting support now are the ones that have no businesses in being in business at all.

The economy will sufferer as a result.

To beat this system you have to become as fraudulent and cavalier as the worst of the competition, not as efficient and well run as the best.

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When Is A Bank Too Big To Save?

Disregarding the question of whether it should be saved, the question of whether it can be saved is all down to the perceived credit worthiness of the person doing the saving, which, for a really big bank, will be the state. If the amount of money required is greater than the amount the bond markets collectively believe the government has or can raise, then it's not savable or, at least, any fix is will be temporary and followed by an Argentinian style financial meltdown. As a rule of thumb, I would think that any bank with potential losses on the book of 25%+ of GDP of its host country would be around about the cut-off point.

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