Rath on 04 November 2009
| mrstickball said: But here's a question: What exactly would we have lost if the banks went under? It's not like every single bank participated in the atrocious behavior, and sold so much toxic assets. Many were left unscathed. Furthermore, the toxic mortgages would not have been forfeited and the houses would have been given to the bad purchasers for free. The debts would of been outstanding, still. Other banks would have come in and bought the toxic assets at discounts (as they always have done) and banks would have actually learned a lesson. |
The financial system is quite tightly linked. Even the banks that didn't have the large amounts of toxic assets were affected by the financial crisis (from my understanding).
Worst case scenario is that the financial sector would have completely imploded, there would have been runs on banks almost no lending and jut a complete economic disaster. Basically all the major banks would have collapsed.
Best case scenario - a few more large banks collapse, eventually the sector pulls through and we are were we are now in five years time (and with the government not having given out a ridiculous amount of money in loans).
