Author Topic: Beginner Questions  (Read 4801 times)

rawraw

  • Hero Member
  • *****
  • Posts: 2776
    • View Profile
Re: Beginner Questions
« Reply #15 on: October 05, 2016, 05:55:10 PM »
In reference to the unlikely event that Lending Club will fail and in turn their backup plan for servicing the loans afterwards fails as well.
I don't understand the too big to fail tie in.

Debt Free

  • Full Member
  • ***
  • Posts: 110
    • View Profile
    • Email
Re: Beginner Questions
« Reply #16 on: October 05, 2016, 09:59:28 PM »
Referring to the financial crisis of 07-08 and the Enron scandal...

Exert from https://en.wikipedia.org/wiki/Too_big_to_fail
"The "too big to fail" theory asserts that certain corporations, and particularly financial institutions, are so large and so interconnected that their failure would be disastrous to the greater economic system, and that they therefore must be supported by government when they face potential failure."

Emmanuel

  • Full Member
  • ***
  • Posts: 157
    • View Profile
    • LendingRobot
Re: Beginner Questions
« Reply #17 on: October 06, 2016, 02:01:48 PM »
In reference to the unlikely event that Lending Club will fail and in turn their backup plan for servicing the loans afterwards fails as well.
I don't understand the too big to fail tie in.

I you owe $1M to your bank, you have a problem. If you owe $100M to your bank, your bank has a problem.

If your bank owes $1B to the American people, they have a problem. If you bank owes $100B to the American people, then the Government has a problem.

Rob L

  • Hero Member
  • *****
  • Posts: 2081
    • View Profile
Re: Beginner Questions
« Reply #18 on: October 06, 2016, 05:10:53 PM »
In reference to the unlikely event that Lending Club will fail and in turn their backup plan for servicing the loans afterwards fails as well.
I don't understand the too big to fail tie in.

I you owe $1M to your bank, you have a problem. If you owe $100M to your bank, your bank has a problem.

If your bank owes $1B to the American people, they have a problem. If you bank owes $100B to the American people, then the Government has a problem.

Well said!

Debt Free

  • Full Member
  • ***
  • Posts: 110
    • View Profile
    • Email
Re: Beginner Questions
« Reply #19 on: October 07, 2016, 05:09:23 AM »
In reference to the unlikely event that Lending Club will fail and in turn their backup plan for servicing the loans afterwards fails as well.
I don't understand the too big to fail tie in.

I you owe $1M to your bank, you have a problem. If you owe $100M to your bank, your bank has a problem.

If your bank owes $1B to the American people, they have a problem. If you bank owes $100B to the American people, then the Government has a problem.

Well said!

Took the words right out of my brain!!!   :)