The Federal Reserve, America’s central bank, exists to serve big banks and Wall Street.
There is no other reason for the existence of the Fed. None.
Central banks exist to backstop banks. They were all created by bankers to serve them.
When banks get into financial trouble (for any number of reasons, all of them having to do with their bad management and greed), if there is no backstopping angel with unlimited (completely made up out of thin air) resources to bail them out, they would shut down.
And they should shut down. Sure, there would be losses. Equity owners would lose, creditors would lose, and some depositors would lose money, too, if they aren’t covered by FDIC insurance.
But if banks were allowed to fail, given they were each, on their own, insignificant enough to the financial system – to the whole economy – that they could fail without doing economic damage, they should be allowed to fail. Small banks are still allowed to fail based on this exact principle.
(Read the rest of the story here…)