The End Of Moral Hazard And The Dollar’s Debasement

by Tyler Durden

Thursday, Mar 23, 2023 – 07:20 AM

Authored by Simon White, Bloomberg macro strategist,

A full guarantee of all bank deposits would spell the end of moral hazard and mark the final chapter of the dollar’s multi-decade debasement.

It’s said the cover-up is worse than the crime. With the latest banking crisis in the US, it’s the clean-up that could end up doing far more lasting damage. The failure of SVB et al prompted the FDIC to guarantee that all depositors will be made whole, whether insured or not.

The precedent is being set, with Treasury Secretary Janet Yellen commenting on Tuesday that the US could repeat its actions if other banks became imperiled. She was referring to smaller lenders, and denied the next day that insurance would be “blanket”, but given the regulatory direction of travel over the last forty years, this will inevitability apply to any lender when push comes to shove.

To continue from original source; https://www.zerohedge.com/markets/end-moral-hazard-and-dollars-debasement

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