Large private banks do not absorb systemic risk; they externalize it.
1. Empirical fact In every major crisis since 1980 (Savings & Loan 1980s, LTCM 1998, 2008 Global Financial Crisis, 2020 COVID shock), the state or central bank ultimately backstopped losses through liquidity, guarantees, or recapitalization. Savings & Loan crisis … Continue reading →
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