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