The given reason for the bail outs was systematic risk to the entire banking sector because they were all exposed to the same risks and those risks were more correlated than people believed.
In the case of a big bank making a series of small bad bets it would not really affect others like in this case. Other banks don't care about this product failing. What, IMO, is more likely that just their profitability will suffer till they start making better decisions again and if WF persists with the bad decisions the valuable parts will be acquired.
In the case of a big bank making a series of small bad bets it would not really affect others like in this case. Other banks don't care about this product failing. What, IMO, is more likely that just their profitability will suffer till they start making better decisions again and if WF persists with the bad decisions the valuable parts will be acquired.