No. It is backed solely by the collateral they get for the loans. Not by the gov't.
When you fail in your duty, you should take a haircut.
Fully agreed. There shouldn't be any bank rescues without hair cuts.
And they will be bailed out by loans from their governments to the debtor countries' governments. Those loans will have to be repaid.
No. They are getting bailouts from their own gov'ts directly. HRE wasn't rescued by the Irish gov't with a German loan. The Landesbanken weren't rescued by the Icelandic gov't or the US gov't with loans from Germany.
How's it fair to put taxpayers somewhere on the hook for debts that they neither issued nor incurred?
Because they are part of a state, that has granted banking licenses without proper control. Der Amerikaner ist die Orchidee unter den MenschenVolker Pispers
It is legal tender. That's a form of government backing.
Because they are part of a state, that has granted banking licenses without proper control.
I suppose you can make that case. I happen to disagree, but I suppose you can make the case.
- Jake If you only spend 20 minutes of the rest of your life on economics, go spend them here.
Perhaps to some degree, but state's (not even democratic) mandate is not open-ended. There are limits, where individuals are not tied to government's decisions.
