The issue is expected loss. No one knew what is the expected loss in a crisis. This is why some of the Lehman debt holders actually made money from the bankruptcy. This is why TARP actually made money. It is because…
The issue here is that we know Greece is not as competitive in exports as Germany. So what can Greece do to run a trade surplus while in a common currency union with Germany? They are not able to depreciate their…
I guess you have to define what a solvent bank is. I don't think any bank can handle a sustained run given their liability duration mismatch. So I am not sure what do you mean that you can't create a panic. Its always…
The issue is expected loss. No one knew what is the expected loss in a crisis. This is why some of the Lehman debt holders actually made money from the bankruptcy. This is why TARP actually made money. It is because…
The issue here is that we know Greece is not as competitive in exports as Germany. So what can Greece do to run a trade surplus while in a common currency union with Germany? They are not able to depreciate their…
I guess you have to define what a solvent bank is. I don't think any bank can handle a sustained run given their liability duration mismatch. So I am not sure what do you mean that you can't create a panic. Its always…