Banks are more inherently fragile than ordinary firms because the deterioration of their product is hidden: their reputation stays good until it is too late for depositors to act, unlike a carmaker whose declining quality becomes visible through accumulating consumer reports.

causalpending

Speaker

Russ Roberts

Evidence Quote

in the case of banking the reputation stays good until sort of too late for people to do anything about it

Source

Arnold Kling on the Unseen World of Banking, Mortgages, and Government 07/5/2010EconTalk
Created: 6/13/2026, 7:04:06 PM

My Notes

Loading notes...