American Presidential Politics and foreign affairs Message Board

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Politics : American Presidential Politics and foreign affairs

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To: DuckTapeSunroof who wrote (41613)	3/2/2010 2:26:28 PM
From: TimF	Read Replies (1) of 71588

If an I-bank or other wants to gamble in a high risk game Again, we largely aren't talking about high risk games. If the I-Bank has to cleave-off some subsidiary to do their risky prop. trading that A-OK with me. If the subsidiary is so totally separate as to effectively be another company, than that's the same as saying "the trading is not alright with me". If it isn't, than you aren't really changing the risk. The taxpayers on on the hook for deposit insurance. That insures the deposits, not the bank itself. And if by I-Banks you mean investment banks, than they don't have taxpayer backed deposit insurance. the slow, stodgy (but economically systemically IMPORTANT) normal deposit-taking and lending operations! Limiting them to such activities creates risk of them being unprofitable when such activities are unprofitable.

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