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|User Info||Rebuttal To Mish: FRL; entered at 2009-05-07 20:07:15|
Registered: 2008-01-22 Texas
It assumes proper design and a system managed with integrity despite powerful incentives for corruption. I'm not sure those can be taken for granted most of the time and will almost certainly be cast aside in the frenzy of a mania - at least that's what history would indicate.
Thank you for that. This kind of middle ground is where I want to discuss this topic.
I don't think the big IFs I mentioned can be taken for granted.
I'm going to post in the Monetary forum on possible cures for FRL as it exists in the US today, but my thinking will be going along these lines:
1. Efficient and ruthless liquidation of a failed bank
2. More personal exposure by bank owners to bank losses (rolling back some of the limited liability protections)
3. Removing the federal government from the demand deposit insurance business
4. More public transparency to the bank's balance sheet and valuation methods
Some new approach incorporating those would be something I would like to see proposed and tried.