Very dumb and really doesn’t recognise that the business model of banking is meant to be very cyclical. They’re supposed to make money in good times so they can build up equity buffers that they burn through when credit losses hit in bad times. Any government that wants to stop the former also needs to be ready to put their taxpayers’ money on the line to clean up the mess when the latter happens.
Right, and that’s another part of the problem; they most certainly won’t be saving the money for that purpose. I conjecture they will spend it as soon as they get it.
And when shit inevitably hits the fan, the banks won’t have as much saved up as they may need which would further exacerbate a future financial crisis.
Very dumb and really doesn’t recognise that the business model of banking is meant to be very cyclical. They’re supposed to make money in good times so they can build up equity buffers that they burn through when credit losses hit in bad times. Any government that wants to stop the former also needs to be ready to put their taxpayers’ money on the line to clean up the mess when the latter happens.
Right, and that’s another part of the problem; they most certainly won’t be saving the money for that purpose. I conjecture they will spend it as soon as they get it.
And when shit inevitably hits the fan, the banks won’t have as much saved up as they may need which would further exacerbate a future financial crisis.
Yep. Populists rarely plan for the long-term.