Good Essay About Why Save The Big Banks

Type of paper: Essay

Topic: Banking, Economics, Economy, People, Investment, Failure, Bachelor's Degree, Stock Market

Pages: 1

Words: 275

Published: 2021/03/23

Would the failing of the big banks fail the whole USA economy? The fundamental argument in the explanation of the people saving the banks is that these banks have a critical role in the economy. Should they fail, they shall trigger shock waves across the whole economy leading to failure of the economy. Although some economists argue against such propositions, there are economic facts that explain such economic choices.
First, when big banks fail, it leads to many of the employees losing their jobs. For example, a bank that had a workforce of thirty thousand people or more would lead to at least more than eighty percent of them losing their jobs. Some economist tends to claim acquiring the big banks is also possible even if it by a much smaller bank. However, there is no surety of such since a smaller bank has less experience, assets, and also managerial capacity to handle big banks or the many clients associated with the big banks. Saving the employment of the people, therefore, becomes a priority. A similar fate applies to the shareholders who may lose a lot of revenue due to the falling of the bank as well as the mortgage market.
Secondly, big banks are the measure of the overall economic prowess of the country. A country without a strong banking system cannot attract investors from inside leave alone outside. Many investors tend to pull out their deposits from the banks if the reputation is bad. Due to this, there is a lower investment across the country that may lead to shutting down of the economy. Moreover, loans serve as an impetus to economic growth. Without lending institutions, there would be fewer investments. The result there would be a massive cumulative failure that hurts everyone in the country. The actions of saving the banks as opposed to the people are deliberate. The government does not forget to save the people but saves the economy for the people even when such may hurt them. From the above premises; saving the banks is a necessary evil.

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Good Essay About Why Save The Big Banks. Free Essay Examples - Published Mar 23, 2021. Accessed May 20, 2022.

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