Why Banks Fail
1,840,093
Published 2023-03-17
All Comments (21)
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That "The Big Short" outro though in the end đź‘Ś- great stuff, Johnny.
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There's the example of how Iceland's government dealt with their bank collapse in 2008. As far as I know, they chose to save the clients' money, but not the bank itself, and punished the managers and reckles investors and not the majority of the people. They also adjusted more policies and achieved unexpected economical growth after the whole country has basically bankrupted in the crisis
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Didn't Iceland let banks fail, and actually sought to prosecute the bankers? Would've been nice to hear about that approach
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I think you hit the nail on the head - saving the bank is only good in the short run. In the long run it erodes all senses of accountability and a greater loss overall.
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It's amazing that a single bank in California failing to do the one thing we thought they did made the entire country turn into panic mode
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You basically walked through the reason why we need to have public banks without every realizing that we need to have public banks. Our banking system is pretty far from: "leads us to all work together for the prosperity and growth of society".
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Someone on Twitter said it best:
“If taxpayer money bails out a bank, the bank should become publicly owned.
You can’t privatize the profits, but socialize the losses.” -
Johnny I love how balanced your content is and how you strive to keep growing. Keep it up. Definitely one of the best creators on YouTube
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Props to you for making an amazing video in record time! People need to hear this stuff!
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It’s really hard to decide on this channel but this is one of the best useful content of the channel.
Thank you and your wonderful team. -
"The reality is that we don't have to worry." Spoken like a true economist. Someone who is looking at the system as a whole, but forgetting about the extreme inequality and poverty that this system is, relentlessly, creating.
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Johnny another banger. Keep up all the good work. You are far and away my favorite journalist. Until I can afford to pay for your subscription I will be liking and sharing everything. Thank you so much for everything you and your team do
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I like how these people who tell us "don't make bad decisions with your money, or you will suffer the consequences ." are the same people WE have to bail out when THEY make the bad decisions. Glad we all get to play the same game. SMH
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I have watched many videos about SVB collapse since it happened, but only johnny harris can make it look so simple that my grandma can understand it (perfect as usual)!
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One other aspect that should be considered is public and institutional confidence that the FDIC will be able to meet the demands of the next bank failure. Like with the 10% deposit requirement, the FDIC collects insurance payments from member banks that is only a small fraction of the total assets covered by the insurance. It also depends on only an extremely small number of bank failures at any one time.
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I've always struggled getting the economics of banks (when I was in college) and you managed to make it understandable in this video.
Thank you Johnny. -
A reasonable option is that when the government bails out a bank, they should also get certain amount of stock options - essentially owning part of the bank, so that can get a return when the bank recovers. And then let the bank slowly buy those stocks back over a long period of time.
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Johnny, I love your videos on economy. They are very educational!
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Hey Johnny, one key detail you left out: The FDIC sold all the assets of SVB to pay the account holders, not the shareholders (who were left out to dry). So this is a MASSIVE victory for everyone except the greedy SVB owners. This is how the system should work, and we should celebrate that we found a way to punish greed while ensuring people's money is safe.
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Thanks a lot for gathering all of the information and giving it a historical informative background.
