We’ve been arguing about deposit insurance for 200 years
Debating the tradeoff between moral hazard and financial stability is nothing new
After SVB suffered a bank run, depositors worried about the safety of their money at other banks. This led to some odd things, like small companies thinking they need to do bank analysis. From the WSJ:
“I think we need to analyze banks just like they analyze us,” said Brent Frederick, owner of Minneapolis-based Jester Concepts, which has five restaurants…
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