Ilseop Lim

“Under the current US system, federal deposit insurance is capped at $250,000 per account.24 This coverage limit reflects a consumer protection philosophy; small retail account holders presumably lack the capacity to monitor bank solvency. But if we view deposit insurance through the lens of panic prevention instead of consumer protection, then the justification for coverage limits becomes far murkier. As we will see in future chapters, sophisticated institutional accounts are far more likely than small retail accounts to redeem en masse, precisely because they are paying closer attention. If panic prevention is a key goal, then coverage limits may very well undermine it.”
― Morgan Ricks, The Money Problem: Rethinking Financial Regulation

“In other words, the world will face the threat of financial crises as long as risk-taking and maturity transformation remain central to finance, and as long as humans remain human. Unfortunately, disaster will always be possible.”
― Ben S. Bernanke, First Responders: Inside the U.S. Strategy for Fighting the 2007-2009 Global Financial Crisis

“Even when state money became paper, and therefore intrinsically worthless, it was thought desirable to maintain belief that government notes – promises to pay the bearer – were in fact debt certificates backed by gold. Until 1971, the value of the American dollar was widely believed to depend on its convertibility into gold, as though the value of gold guaranteed the value of paper dollars.”
― Robert Skidelsky, Money and Government: A Challenge to Mainstream Economics

“Low-quality mortgages ended up imperiling the entire financial system—not so much because of the direct losses on the mortgages themselves, which were significant but likely manageable, but because of the securitization boom, which carved those mortgages into securities that became a ubiquitous form of currency and collateral throughout the system.”
― Ben S. Bernanke, First Responders: Inside the U.S. Strategy for Fighting the 2007-2009 Global Financial Crisis