A Snippet from the Bank for International Settlements

Big banks continue to have an interest in driving up their leverage without enough regard for the consequences of failure: because of their systemic weight, they expect the public sector to cover the downside.

The bankers are acting rationally. They know that that they can make huge profits from  and take huge bonuses. If, or when, things go wrong, everyone else covers the banks’ losses. Bear that in mind next time you hear a UK politician extolling the City of London as the goose that lays the golden egg. The City is a cuckoo and it won’t rest until it has the nest all to itself.

From the BIS Annual Report 2011/2012 via William Keagan at the the Observer.

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