The Federal Reserve was planning to cross a wide stream. It had crossed many such streams and was skilled in crossing them well. But just as it stepped into the water, investment banks asked to ride along. They didn’t have the assets to cross the stream but knew the Fed did. The Fed looked at the investment banks and said, “I can’t let you ride on my back. You want me to take your bad debt in exchange for my instruments which have the full faith and credit of the United States,” it said. “You’ll sting me.” The investment banks said, “If we’re not able to get to the other side, everybody who is waiting for us will panic and that will be terrible.” “Besides,” they said, “If we sting you, we’ll all drown.”
The Fed thought, and said, “OK, I guess that makes sense. I’ll help you get to the other side, but you can’t behave as you have before, OK?”
“OK” replied the investment banks.
Halfway across the stream, the investment banks stung the Fed. The Fed looked back wide-eyed and asked, “With all that was at stake, why did you sting me? Now, we’re both going to drown.” As the water rose around them all, the investment banks replied, “We’re sorry. It’s just what we do.”
Apologies to Aesop.
Salt Lake City, Utah