I’d agree that’s what happens with the big rescue loans that save businesses. But, that’s not what’s happening here. There just such extreme hyperbole about how this removes all risk for banks.
I guess where I can meet you in the middle is that in this crash from excessive speed (not over the speed limit, but only because they lobbied to have the speed limit raised) the customers are getting taken care of, the business owner loses his business and his competitors have to pay for the cleanup.
I’m curious how the banks feel about this. I really don’t believe that doubt about the banking industry is in their favor, even if it could be a differentiator in theory. The amount they’ll pay is a tiny fraction compared to the market cap lost this week.
Thats not the definition of a customer, thats the definition of an investor.
The fact that it is supposed to be a low risk low return investment does not change that fundamental relation.
> Why would any bank ever conduct risk assessment if their potential failure will be paid by the industry as a whole.
So the bank doesn’t go under, causing them to lose their jobs and equity.