Most risky loans require collateral and have legal stipulations that have pretty onerous consequences if the money isn't repaid, so there is a lot risk of default in typical loans and in that case, the bank gets something, which is thought to be of higher value than the monetary outlay.
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Most risky loans require collateral and have legal stipulations that have pretty onerous consequences if the money isn't repaid, so there is a lot risk of default in typical loans and in that case, the bank gets something, which is thought to be of higher value than the monetary outlay.