On: What Have VCs Really Done for Innovation?

[sachinag]

The FDIC insures deposits of depositors, not loans made by banks. Loans are where banks (traditionally) make their loans, and the banks themselves bear the risk (traditionally) of those loans.

(I hate having to add the "traditionally" thanks to the insane securitization practices of the last decade. shakes fist)

[Eliezer → sachinag]

Sounds like what we need is venture capital securitization!

(I accept no responsibility if this HN comment causes the downfall of America in 20 years.)

[tomjen2 → sachinag]

That is true, but there where (are?) quite some limitations on what kind of investments the banks could/can make if they want FDIC to insure the deposits.