Do the banks believe that the government will bail them out? Yes. They have made that their baseline presumption since the S&L crisis of the 1980s. As for the uninsured deposits, that's not on the banks. If your deposit exceeds the $250,000 account limit for FDIC coverage, it's on you to adjust your account, or to accept the risk.
Do the banks believe that the government will bail them out? Yes. They have made that their baseline presumption since the S&L crisis of the 1980s.
As for the uninsured deposits, that's not on the banks. If your deposit exceeds the $250,000 account limit for FDIC coverage, it's on you to adjust your account, or to accept the risk.
That baseline presumption is also known as a "moral hazard" and some of us have been upset about it since the 1980s, particularly when the Continental Illinois bailout protected not just depositors, but also bond holders.
Do the banks believe that the government will bail them out? Yes. They have made that their baseline presumption since the S&L crisis of the 1980s.
As for the uninsured deposits, that's not on the banks. If your deposit exceeds the $250,000 account limit for FDIC coverage, it's on you to adjust your account, or to accept the risk.
That baseline presumption is also known as a "moral hazard" and some of us have been upset about it since the 1980s, particularly when the Continental Illinois bailout protected not just depositors, but also bond holders.