Steve Eisman Quotes

Investment banks manage to go bankrupt through their investment-banking activities, commercial banks manage to go bankrupt through their commercial-banking activities.

At the heart of banking is a suicidal strategy. Banks take money from the public or each other on call, skim it for their own reward and then lock the rest up in volatile, insecure and illiquid loans that at times they cannot redeem without public aid.

Bank failures are caused by depositors who don't deposit enough money to cover losses due to mismanagement.

Bailing out every bank that fails makes the system riskier, not safer.

Banks are employing risky derivatives strategies to goose up returns….the interbank market could freeze up, and one could well have a full blown financial crisis.

Unregulated derivatives like credit default swaps threaten our regulated markets, or indeed our economy without any Federal agency knowing about it.

The failure of one regional bank, assuming it is following a traditional model, will not threaten the entire system.

The idea that the largest banks in the world would simultaneously fail, need government support, government guarantees, and/or government intervention to survive was not in my range of realistic scenarios.

I do think that the banking system is now in the most perilous state we've seen in over 70 years.

Many of us like to think of financial economics as a science, but complex events like the financial crisis suggest that this conceit may be more wishful thinking than reality.

People think when you have a, quote, 'bank failure,' that that is the end of the bank. And it isn't necessarily.

Given the extent of the exposures of major banks around the world to A.I.G., and in light of the extreme fragility of the system, there was a significant risk that A.I.G.'s failure could have sparked a global banking panic.

I don't think anybody's too big to fail. I think the - I think if what you've got is sort of a large number of institutions who are going to fail, then that ends up affecting the system.

The real danger with debt is what happens if lots of people decide, or are forced, to pay it off at the same time.

The market, as we're all painfully aware in the aftermath of the banking crisis, can be an idiot. It has no perception of right or wrong, or even sensible or insane. It sees profit.

If you owe the bank $100 that's your problem. If you owe the bank $100 million, that's the bank's problem.

If banks anticipate government will come to the rescue should the credit market go badly awry, they may make loans that would otherwise be imprudent, e.g. subprime loans with little prospect of repayment.

If Freddie Mac is unable to raise capital, it could spark a political and financial crisis.

The problem with the focus on speculators, as was demonstrated during the financial crisis, is that it tends to divert attention from the real villains. During the financial crisis, the villains were the actions of the banks, not the speculators betting on bank share prices.

The Greek debt issue, for example, is such a threat because if that country ever defaulted, it might cause some bank that's 'too big to fail' to actually fail.

Overpaid bankers taking big risks with other people’s money brought the world to its knees..

Compelling large banks to hold more capital reduces their risk of failure, but as the last financial crisis [the Meltdown of 2008] demonstrated, during a wide-spread panic, investors and lenders lose all faith in the values banks have assigned to their assets, and many mistrust the banks that claim to have enough capital.

There isn't a bank in the world that could withstand a run. They all borrow short and lend long, regardless of what they say.

We don't have the necessary laws or powers to deal with failing non-bank institutions. If they're a big bank, the depositor has deposit insurance, and the regulators can wind them down without throwing them into bankruptcy.

Why do we have financial crises? Why do banks lose money? If history is any guide, it hasn't often been the result of speculative bets. It has been the result of banks making loans to individuals and businesses who can't pay them back.