this post was submitted on 22 Dec 2024
1620 points (97.4% liked)
Technology
71995 readers
4222 users here now
This is a most excellent place for technology news and articles.
Our Rules
- Follow the lemmy.world rules.
- Only tech related news or articles.
- Be excellent to each other!
- Mod approved content bots can post up to 10 articles per day.
- Threads asking for personal tech support may be deleted.
- Politics threads may be removed.
- No memes allowed as posts, OK to post as comments.
- Only approved bots from the list below, this includes using AI responses and summaries. To ask if your bot can be added please contact a mod.
- Check for duplicates before posting, duplicates may be removed
- Accounts 7 days and younger will have their posts automatically removed.
Approved Bots
founded 2 years ago
MODERATORS
you are viewing a single comment's thread
view the rest of the comments
view the rest of the comments
So banks will be public domain when they're bailed out with taxpayer funds, too, right?
At the same time, if a bank goes under, that means they owe more than they own, so "ownership" of that entity is basically worthless. In those cases, a bailout of the customers does nothing for the owners, because the owners still get wiped out.
The GM bailout in 2009 also involved wiping out all the shareholders, the government taking ownership of the new company, and the government spinning off the newly issued stock.
AIG required the company basically issue new stock to dilute owners down to 20% of the company, while the government owned the other 80%, and the government made a big profit when they exited that transaction and sold the stock off to the public.
So it's not super unusual. Government can take ownership of companies as a condition of a bailout. What we generally don't necessarily want is the government owning a company long term, because there's some conflict of interest between its role as regulator and its interest as a shareholder.
With banks this is also true if they do not have enough liquid assets to meet the legal requirements. So the bank might not be able to count all bank accounts as assets but the FDIC is. Also they can then restructure the bank and force creditors to take a haircut.
This is why investment banks should be separate from banks that have consumer accounts that are insured by the government.
Then you can just let the investment bank fail. This was the whole premise of glass steagall that was repealed under clinton..
Happy cake day!
Public domain wouldn't be the right term for banks being publicly owned. At least for the normal usage of Public Domain in copyright. You can copy text and data, you can't copy a company with unique customers and physical property.
Oh good point. I'm not actually sure what the phrase would be.. Publicly owned?
Just FYI of the bank bailouts in the US, the banks paid back the bailout plus interest back to the government. Meaning the govt actually made a profit off the bailout. There’s a lot of things wrong with both banks and the govt, but generally this is not one of them. https://www.propublica.org/article/the-bailout-was-11-years-ago-were-still-tracking-every-penny
Super interesting, learned something new today. Thanks!
I mean, that sometimes did happen.
Germany propped up the Commerzbank after 2007 by essentially buying a large part of it, and managed to sell several tranches with a healthy profit.
Same is true for Lufthansa during COVID.
Banks are redundant, so is the stock market. These institutions do not need to, and should not be private. They are level playing fields in the economy, not participants trying to tilt the board for taking over the game.
No, "the banks" wouldn't be what the AI would be trained on, it would be the private info of individuals the banks do business with.