In a properly regulated world, all of these clowns would be shut down today and some of them would go to jail.
Instead we do no regulation, these "not-banks lying and claiming your money is safe" get to harm a lot of people, and the public further loses trust in everyone involved.
To anyone reading this who has money in any business that claims not to be a bank but instead your money is super-safely stored in a real bank somewhere and so there's no risk to you: run away, run away fast. Get your money out and close your account. You're in a Ponzi scheme and you don't realize it.
In a properly regulated world, everyone would have some sort of personal insurance for counterparty risk. You pay $x per year and the government never steps in.
FDIC is a moral hazard in my opinion. The only thing the government should do is let people with low incomes claim their money back in advance so that they can pay their bills.
Comments
In a properly regulated world, all of these clowns would be shut down today and some of them would go to jail.
Instead we do no regulation, these "not-banks lying and claiming your money is safe" get to harm a lot of people, and the public further loses trust in everyone involved.
To anyone reading this who has money in any business that claims not to be a bank but instead your money is super-safely stored in a real bank somewhere and so there's no risk to you: run away, run away fast. Get your money out and close your account. You're in a Ponzi scheme and you don't realize it.
In a properly regulated world, everyone would have some sort of personal insurance for counterparty risk. You pay $x per year and the government never steps in.
FDIC is a moral hazard in my opinion. The only thing the government should do is let people with low incomes claim their money back in advance so that they can pay their bills.