Reporting and opinion by Mathew Carr

www.imf.org/en/Publications/fandd/issues/2023/06/POV-riskless-capitalism-rajan-zingales

May 30-31, 2023 — It’s lovely when somebody writes something that means you don’t have to do it yourself.

When it is the IMF publishing — even better. Note, while the report was published by the IMF, the IMF is not necessarily endorsing the views expressed.

It concludes the US undermined free-market discipline by granting benefits to a select group of SVB stakeholders who did not pay for those benefits.

Authors: RAGHURAM RAJAN is the Katherine Dusak Miller Distinguished Service Professor of Finance at the University of Chicago’s Booth School of Business.

LUIGI ZINGALES is the Robert C. McCormack Distinguished Service Professor of Entrepreneurship and Finance at the University of Chicago’s Booth School of Business.

CarrZee: Those in business should face the risk of their decisions. It’s not fair if you only get upside and no downside.

IMF publication: “The government decision [on SVB] was made after immense lobbying, including many cries for help from venture capitalists.

“We need to develop better metrics based on political influence to limit the political power of firms.”

Read the full article: I reproduce this snip for convenience:

CarrZee: It’s not good enough.

(Updates to make more clear, notes that the IMF view may be different from authors’ view)