Exact(1)
"In the financial crisis the banks got the upside and the public got the downside," said Stephen G. Cecchetti, head of the monetary and economic department of the Bank for International Settlements, in Basel, Switzerland.
Similar(59)
When things go well, they get the upside; when things go badly, that is largely someone else's problem.
Let's be honest: Everyone would like an arrangement in which they personally get the upside and the taxpayer gets the downside.
"They want to be able to take big risks where they get the upside and the taxpayer gets the potential downside".
Powerful people on Wall Street will get the upside when things go well; you and I get stuck with the downside.
But what we have now isn't private enterprise, it's lemon socialism: banks get the upside but taxpayers bear the risks.
Highly leveraged financial institutions do not have the incentive to be careful; their executives get the upside when things go well, and the downside is someone else's problem.
The people who run global megabanks get the upside when things go well – they are paid based on their return on equity unadjusted for risk, so they prefer a lot of debt piled on top of very little equity.
"If Wall Street gets the upside in big bonuses from its high-risk derivatives deals, then it should also have to pay the downside for any losses," Kelleher wrote.
We know that banks like to borrow a great deal relative to their equity funding — excessive leverage, as it is known, means that the people running banks get the upside when things go well and someone else gets the downside when everything goes badly.
This is people who want to overleverage and risk the system - because, once again, they will get the upside and taxpayers/all citizens get the downside," Simon Johnson, a professor at the Sloan School of Management of the Massachusetts Institute of Technology and a senior fellow at the Peterson Institute for International Economics, wrote on his blog.
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