> People like Jason Calcanis were screaming on Twitter like the world was going to collapse and that the contagion would take down regional banks hurting ordinary consumers.
If the 18th-largest bank in the country were to be allowed to collapse, with depositors losing money due to something they had no control over, why would any non-insane depositor keep their money in the 17th, or the 19th largest bank?
Any rational person will follow this line of reasoning to conclude that the only safe place to deposit your money would be a too-big-to-fail bank. And nobody wants to see that.
If the 18th-largest bank in the country were to be allowed to collapse, with depositors losing money due to something they had no control over, why would any non-insane depositor keep their money in the 17th, or the 19th largest bank?
Any rational person will follow this line of reasoning to conclude that the only safe place to deposit your money would be a too-big-to-fail bank. And nobody wants to see that.