Fitness Quote by Danielle DiMartino Booth
““Gambling has been fed by knowledge that, if disaster struck, someone else—borrowers, investors, taxpayers—would end up bearing at least some of the losses,” wrote the Economist. At every stop on the securitization gravy train, investment banks generated big fees for themselves. They had no incentive to tap the brakes.””
About This Quote
Source Article: The Economist, 2020
Securitization creates incentives for banks to ignore risks, shifting losses to others.
In simple terms: Banks profit while shifting risk to borrowers and taxpayers.
Key Takeaway
Demand accountability for risk transfer.
Themes
finance
risk
ethics
policy
Mood
critical
concerned
informative
Type
journalistic
analytical
When to use this quote
- regulatory hearings
- investment meetings
- public policy debates
Key Concepts
securitization
moral hazard
systemic risk
Questions to Reflect On
- How can we align incentives with stability?
- What safeguards prevent risk dumping?
A Different Perspective
Regulation may stifle legitimate financial innovation.
![“On the Glass-Steagall thing, like I said, if you could demonstrate to me that it was a mistake, I'd be glad to look at the evidence. But I can't blame [the Republicans]. This wasn't something they forced me into. I really believed that given the level of oversight of banks and their ability to…” quote by William J. Clinton](https://sms4smile.com/quotes/img-quotes/c8e/william-j-clinton-302_ability_on-the-glass-steagall-thing-like-i-said_2996009.jpg)
