First, what is an unsecured loan? Answer: An unsecured loan is a loan for which you don't have to offer any collateral (credit cards), like a car or your house, to secure the loan.
Second, what is the unsecured legal lending limit for nationally chartered banks? Answer: 15% of a bank's capital and surplus.
Third, why is such knowledge relevant? Answer: Our financial system can not operate efficiently if financial institutions and investors assume that government will protect them from the consequences of failure. That is a complete anathema of a market economy. The only way to secure a viable financial system is to change that limit to 100%. That is, "$1 of bank capital for each $1 of unsecured debt."
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