Insurance principle
A large institution like a bank can actually dump the individual shocks of some little drama happening here and there, and paying a premium, you can actually spread that risk over the whole system.
Immediately related elementsHow this works
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The Global Financial Crisis »The Global Financial Crisis
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How should the US and other governments respond? »How should the US and other governments respond?
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Measures to prevent Financial Crisis recurring? »Measures to prevent Financial Crisis recurring?
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Prohibit wagers on upside or downside moves of prices »Prohibit wagers on upside or downside moves of prices
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Finance is extremely usefull »Finance is extremely usefull
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Insurance principle
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