How Regulators Are Making Finance More Fragile 2

Concentrating risk into central clearinghouses sounds like a good idea, but only serves to create a gigantic short convexity position in the middle of the financial system

Considering the severity of 2008 and how quickly the largest banks in the US became insolvent, it is quite clear that the financial system had too many mega-banks even then.

Which means that the American financial system at even greater risk today, considering how much the US banking industry has consolidated and shrunk in the decade plus since.

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