When is a bailout appropriate or not appropriate?

Excellent question.

And it's one that's going to forever torture the policymakers and decision-makers in Washington and every other capital that oversees a, uh, banking industry.

Because the overall economic and, uh, financial environment is going to play a key role in that.

If there is a time of financial stability and overall economic growth, uh, that is, you know, continuing to take place, and one of these large institutions fails as an isolated event due to perhaps a massive fraud or a really bad trade or, or... whi- which, yeah, quite candidly is pretty improbable, but sometimes these things do happen, then probably a bailout is not gonna be necessary.

That particularly with the protocols and policies and programs that have been put into place after the global financial crisis of two thousand eight, that large complex institutions should be able to fail in isolation without causing the implosion of the rest of the financial services sector or the economy.

However, and this is where the situation changes, typically, those large institutions are stressed when there is economic decline and financial stress in the, uh, financial services industry.

Should it apply to those size banks? And if it did, would the solution for Silicon Valley have been very different?