Chapter
Gaining Trust in the Financial System
28:33 - 34:40 (06:07)
The trust in the financial system needs to be fixed before any bailouts or investments can be made. While encouraging risk has its benefits, there is a fine line to be aware of in avoiding moral hazard.
Clips
The speaker discusses how some financial institutions allow flexibility in equity and bond valuation, enabling investors to earn more interest and avoid updating their equity valuation even if they become insolvent.
28:33 - 30:07 (01:34)
Summary
The speaker discusses how some financial institutions allow flexibility in equity and bond valuation, enabling investors to earn more interest and avoid updating their equity valuation even if they become insolvent.
ChapterGaining Trust in the Financial System
EpisodeMaking Cents of SVB’s Collapse With Mark Cuban and Sheila Bair
PodcastThe Problem With Jon Stewart
The US banking system's ultimate product is trust, and any risk from the banking system is a systemic risk.
30:07 - 31:02 (00:55)
Summary
The US banking system's ultimate product is trust, and any risk from the banking system is a systemic risk. The federal government's approval of COVID-19 relief programs creates a limitless shenanigans environment for the banking system, which is a concern for some people.
ChapterGaining Trust in the Financial System
EpisodeMaking Cents of SVB’s Collapse With Mark Cuban and Sheila Bair
PodcastThe Problem With Jon Stewart
The key to gaining trust in a banking system is fixing the issues that erode that trust, such as incompetent investment strategies, before taxpayer money is used to bail out banks.
31:02 - 33:27 (02:24)
Summary
The key to gaining trust in a banking system is fixing the issues that erode that trust, such as incompetent investment strategies, before taxpayer money is used to bail out banks. Without trust, there are systemic problems.
ChapterGaining Trust in the Financial System
EpisodeMaking Cents of SVB’s Collapse With Mark Cuban and Sheila Bair
PodcastThe Problem With Jon Stewart
The banking industry needs a system of trust and competence, and there should be a level of pain for those who perform incompetently.
33:27 - 34:40 (01:12)
Summary
The banking industry needs a system of trust and competence, and there should be a level of pain for those who perform incompetently. The SEC may go after those responsible for the recent stock market crash, and there needs to be accountability for the Fed as well.