tag:blogger.com,1999:blog-1194375569044391746.post6697373489609361467..comments2024-03-29T02:00:55.623-04:00Comments on Corporate Justice Blog: On "Cascading Default, Bank Runs and Catastrophic Risk"Steven Ramirezhttp://www.blogger.com/profile/16741346526253732489noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-1194375569044391746.post-47525477518457642802011-11-27T12:11:14.131-05:002011-11-27T12:11:14.131-05:00Though not a solution to the problem raised by the...Though not a solution to the problem raised by the author (managed Greek default), perhaps more incentives for maintaining deposits with banks might be considered as part of an overall attempt at fixing the problem of bank runs? If an investor wishes to purchase a CD, early withdrawals come with a penalty. Is there some way to give the average investor an incentive for maintaining funds with depositors when not needed so as to reduce damage caused by bank runs?Brett (Memphis Law)noreply@blogger.comtag:blogger.com,1999:blog-1194375569044391746.post-33606211000753618342011-09-29T21:30:55.350-04:002011-09-29T21:30:55.350-04:00I agree that the potential for unlimited downside ...I agree that the potential for unlimited downside exists. However, there is always the remote possibility that the world economy suddenly begins to rebound thereby at least partially curing itself. Assuming this does not occur, I believe the psychological impact of a Greek default is very real and perhaps even more damaging than the actual harm caused. It would immediately decrease the wealth of those invested in the stock market. Unemployment would also rise as businesses would likely cut their labor forces to maintain profits. Even fewer homes would sell and they would sell for less on average. Maybe this is taking it a bit far; however, this snowball effect could very well be a reality if Greece were to default and it were not sufficiently contained. It appears as though it might be past the point of containing.Randall_MemphisLawhttps://www.blogger.com/profile/04980109791802251738noreply@blogger.com