/biz/ - Business & Finance

>>55135202
>The second version of this conflict of interest problem is over-leveraging. Over-leveraging is basically bad risk management that’s allowed by the system and then it goes to a degree that causes systemic large-scale failure, which once again, society AKA we pay for. One good example is the 2008 financial crisis, since then the examples maybe have gotten a little bit smaller but they still continue and I think we’re actually going towards quite a big one again. Archegos is a good example where one guy was able to take billions from banks and actually closed down a few of his counterparties entire departments that traded with him. So one guy was able to do that because he got so leveraged. And then other more recent examples that you’re more familiar with are things like SVB, which is once again a risk management problem. So this second conflict of interest basically allows people to gamble to an excessive degree. And then, as you know, we pay. Not them, we. This model has persisted for many years because it isn’t possible to make it impossible. But now it is. So that’s really what we work on.