‘The financial barons and their CEO partners have a stranglehold over our economy: They are too big to fail and too politically important to suffer any appreciable financial harm.’ Opinion | les_leopold
In case we need any more proof, the bailout of the Silicon Valley Bank is yet another overt sign that we are operating within a new version of capitalism. The wealthiest among us have little fear of losing money from their most important financial investments. They know they will be bailed out, and the rest of us will pick up the tab.
This logic has been understood since the first bank insurance was debated and put in place during the 1930s. So why is this rule being breached now? SVB lobbied successfully to avoid facing the same regulations as the “systemically important” mega-banks. They wriggled out of some of the strongest provisions of the Dodd-Frank banking legislation, as the bank assets threshold wasWhile the need for tighter regulations will dominate the discussion, we are missing the bigger picture.
And they deregulated derivatives that allowed for financial betting involving tens of trillions of dollars. It was argued that these bets would stabilise the financial system by spreading risk far and wide.
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