De Graaf

The Benefits of Too Big to Fail

Sean Ryan is spot on.

Explicit or implicit, either way the costs of implicit backing of risk by governments are obvious now.

If TBTF banks are allowed to exist in the future, which I expect they will, then improved regulation and higher risk insurance should be implemented on a global basis to offset the systemic failure. I believe Strauss Kahn of the IMF talked about that latter issue recently, to form one global pool of insurance covering all major markets.

You can allow greedy bankers to continue, or you socialize some of their profits in insurance pools on a pro rato basis. The bigger the bank, the more it contributes.

Hard work should always be rewarded without limits. But not on the back of society by means of Keynesian leverage.

Time for Austrian economics. The common individual centralized. Not MBA bonuses.