Quote:
Originally Posted by aceventura3
Banks fail. FDIC provides coverage for depositors. Regulators take control of the bank for an orderly disposition of assets. In some cases deals are brokered. In 2008 all of the bank failures were handled orderly, same in 2007, 2006, 2005, etc., etc.
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Of course, we owe the FDIC to New Deal interference in the market place. If those dumbass depositors were smarter, they would have done their homework and stashed their cash in a better bank. They're being rewarded for failure.
Anyway, banks never have enough money to cover a panic. That's the nature of banks. They depend on confidence in the economy and the banking system, so even an innocent, doe-eyed bank could be crushed in a panicky stampede. And even if there weren't, they could be slowly asphyxiated by secondary effects of other bank failures.
You could say the same thing about currency, which would not be unaffected by cascading bank failures.