In response to the joint rescue of bankrupt banks by U.S. regulators, Binance founder and CEO Changpeng Zhao (CZ) tweeted that once regulatory agencies implement a bailout for banks, they will be in a dilemma. Failure to provide assistance would not be in line with the proposition of “protecting consumers.” If banks are bailed out, banks will lose the incentive to manage risks, which will in turn encourage greater and greater risks, leading to more bailouts.
He said it was a thorny issue and suggested regulators only bail out consumers and compensate them. The bankrupt businesses are then closed and some executive compensation is clawed back.
