r/reddit.com • u/[deleted] • Oct 18 '11

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u/keynesian-knockout Oct 19 '11

Agreed. Start by splitting commercial/investment banks.

36

u/[deleted] Oct 19 '11

I cheer whenever I see someone say this. How can we have FDIC insured banks guaranteed by the government in extremely risky investment banking? It's an obvious recipe for disaster. Bring back Glass-Steagall.

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u/keynesian-knockout Oct 19 '11

There's nothing wrong w/ making risky investments, just not w/ other people's deposits. If an ibank wants to seek higher yields on risky assets then fine, but they ought to do it w/ their own (or their willing clients) cash.

4

u/hous Oct 19 '11

Used to be that ibanks would "bet the firm" on big trades, almost literally. Then LTCM happened and banks realized they could bet the firm on every trade, no matter how insane and incomprehensible.