Axioms Quote by James Grant
“It is an axiom nowadays that no bank fails for lack of capital; unprofitable lending is always the underlying cause.”
About This Quote
The statement asserts that bank failures stem from unprofitable lending, not capital shortages, framing it as a modern axiom.
In simple terms: Bank failures are caused by bad loans, not lack of capital.
Key Takeaway
Focus on loan quality to prevent failures.
Themes
finance
risk
banking
Mood
analytical
critical
Type
cautionary
informative
When to use this quote
- bank board meetings
- risk assessments
- policy debates
Key Concepts
credit risk
capital adequacy
regulation
Questions to Reflect On
- Are there cases where capital shortage leads to failure?
- How can lenders improve loan profitability?
