Originally Posted by Gabo
It's good that they paid back their loans, but the real problem is that such banks can act very irresponsibly since they know they will receive bailouts if they ever go under. These banks engaged in risky lending that led to a housing bubble and burst, which caused major economic problems. All the individuals who made poor borrowing decisions with their homes got foreclosed on and paid the price for their poor judgment. The banks, on the other hand, were rewarded with public money for their bad judgment. This encourages banks to act without regard to the potential consequences of their behavior.
In case you missed it, the government forced banks to give out those risky loans. So, as I've said before, it always leads back to the governments incompetence forcing business to do something they don't want to