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Future_Green_7222 t1_jcmytwo wrote

Current economic thinking: bank failures are independent random variables, so the probability of multiple failing at the same time is low

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Spillz-2011 t1_jcn054h wrote

Who says this? If this was the thought there wouldn’t have been a rush to shore things up this week both in the us and credit suisses

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thehallmarkcard t1_jcn82l0 wrote

That’s just not true. We literally do bank contagion simulations and there’s a ton of research on this topic. Prevailing economic thinking is precisely the opposite of what you said.

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jim-bie t1_jcn8lf6 wrote

I have no idea about economics or finance or whatever but I highly highly doubt bank failures are even anywhere near independent

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jim-bie t1_jcn8p52 wrote

I have no idea about economics or finance or whatever but I highly highly doubt bank failures are even anywhere near independent

Also if that was true, wouldn’t the distribution here be highly highly unlikely?

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