On Fri, Jan 23, 2009 at 8:49 AM, <[email protected]> wrote: > This is an important change in the banking system in recent decades – a > significant portion of the banks' liabilities are now debt rather than > deposits, especially the larger banks that are being bailed out.
Do you have numbers for what portion of a bank's liabilities are in the form of debt? My understanding is this is extremely hard to measure because most of these debt-like liabilities are in the form of derivatives and swaps. > Again, the beauty of this is that it makes the banks solvent again, and does > not cost taxpayers anything. The debt-holders now have a riskier > investment, but that is better than the debt-holders being bailed out by the > taxpayers. The debt-holders had risky investments to begin with, and made > lots of profits in good times, and now they, not the taxpayers, should > suffer the losses (or the conversion to equity) in the bad times. A nice sentiment, but it will never happen because of course those debt holders are very powerful politically and won't allow it to happen. -raghu. -- Q: What did the apple say to the orange? A: Nothing, apples don't talk. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
