It muddies things up a lot that folks are using the word “bailout” to mean both “rescuing the bank’s customers” •and• “rescuing the bank corp and its owners.” Those are two very different things! Conflating them up does not help.
People who treated the bank as a bank in good faith when they deposited money there should not lose their money. That seems to me to be both ethical and what stops the contagion.
Folks who thought they could run a bank and just couldn’t hack it should hang out to dry.
Which of those is the “bailout,” and which isn’t?
¯\_(ツ)_/¯
I just know that the bank should fail and its customers should survive.
And please note that letting bank fail is not just vindictive justice. Believing that the government will rescue your company from your own bad leadership incentivizes bad leadership.
(Aside #1: “moral hazard” is an ill-chosen term; it should be “incentives hazard” or some such.)
(Aside #2: the Equifax breach should have been a company-ending event.)
I’ve never heard this term from @ekg@social.librem.one, but if it caught on, I don’t think I’d be upset!
https://social.librem.one/@ekg/110017879167912738
@inthehands after some further research it seems like I was mistaken and a "bail in" can include deposits. I highly doubt that would be realised due to the harm it did when it was last tried, apparently involving the Bank of Cyprus.
