In what feels like deja-vu, governments have had to step in as lenders of last resort to prevent the recent bout of turmoil in the banking sector from escalating into a full-blown crisis. By tapping public funds to shore up ailing private institutions, they have laid bare the huge risks that bank failures still pose to taxpayers and the wider financial system. “I have argued for years that the biggest banks in the world are still too big to fail.
But the move has nonetheless sparked debate over whether this amounts to a bailout. “They say it’s not a bailout because the industry will pay. It’s still a bailout, whoever pays,” said Admati of Stanford. Alongside this, the Fed launched an emergency lending facility for banks after the collapse of SVB and Signature Bank to prevent more failures, exposing the central bank to risky loans, according to Admati.
The post-2008 regulations were indeed intended to prevent future bank bailouts, but recent events demonstrate their inadequacy. It's crucial to reevaluate and strengthen these measures to ensure financial stability and avoid burdening taxpayers.
We the people of the USA love to get dollar offers. We have a great $10,000 gift card giveaway coming up. So why are we missing it? Click the link below to confirm the offer before it expires!💵💝