Opinion
Banking system has become a ward of the state
It may be amusing that those shrieking for a SVB rescue have been the libertarians of Silicon Valley. But few people are capitalists when threatened by losing money they regarded as safe.
Martin WolfColumnistBanks fail. When they do, those who stand to lose scream for a state rescue. If the threatened costs are big enough, they will succeed. This is how, crisis by crisis, we have created a banking sector that is in theory private, but in practice a ward of the state.
The latter in turn attempts to curb the desire of shareholders and management to exploit the safety nets they enjoy. The result is a system that is essential to the functioning of the market economy but does not operate in accordance with its rules. This is a mess.
Financial Times
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