banking

Stress Testing the Banks

If you have to prove you are worthy of credit, your credit is already gone. –Walter Bagehot Timothy Geithner, the Treasury Secretary, has come out with a plan (really more of a vague idea) to “stress-test” American banks to determine whether they can survive this current recession. To be conducted in April, this testing will …

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Why People Have to Make Their Own Mistakes

Found in an Economist article on how a central bank can (or cannot) stop a bank run: “the ultimate result of shielding man from the effects of folly is to people the world with fools.” – Herbert Spencer, State Tampering with Money and Banks